Rules governing the disclosure duties of listed companies have been relaxed slightly under guidelines issued by the Ministry of Finance this week.
Now, instead of being asked to clarify why their share price dips to the floor or soars to the ceiling within five trading days, the period has been extended to 10 days. The updated advice was issued to modify that issued in disclosure Circular No 38 in 2007.
Listed companies, whose after-tax profit in a reporting period in a year varies more than 10 per cent from the figure in the corresponding period the previous year, need to explain why, according to the circular.
Meanwhile, the old regulation stated that companies must explain the reason when profit varied 5 per cent between two consecutive reporting periods.
Other requirements are the releasing of half-year financial reports, as well as regular updates of corporate activities in its website. Securities firms should list quarterly the portfolio and prices of unlisted stocks used for brokerage. Fiscal reports should be publicised on websites of the State Securities Commission, stock exchanges and some national publications.
"The changes create better conditions for listed enterprises when informing the public," said a general director from a Ha Noi-listed broker.
He noted the revised regulation of clarification on after-tax profits would make comparisons easier, leading to more informative reports.
"However, regulators should make sure companies quickly provide information which impact on share price fluctuations," he said.