The China Securities Regulatory Commission issued a revised rule
last night requiring securities firms to adopt new accounting
standards in their information disclosure in order to improve
information quality to public investors.
The Annual Report Content and Format Standards for Securities
Companies (2008 Edition) requires securities brokerages to make
tables in preparation for asset depreciation and notes on entries
to consolidated financial reports from subsidiaries or projects.
Separate audit reports by certified public accountants are needed
for subsidiaries or projects if they enter the consolidated
financial reports of the parent listed brokers.
Moreover, a securities firm has to disclose its definition of
"commonly-accepted" value and how its financial assets are
categorized in the annual report. Innovative financial businesses,
such as issuance of financial derivatives including shares, bonds
and warrants, and details of the funds raised through these
activities, should be reflected in the report. The company's
current capital should also be noted as either the company's own
capital or client's capital.
A securities company should also include the quantities and
distribution status of its operation outlets and service centers in
the annual report, along with the name and contact details of its
president. The report should furthermore disclose the company's net
assets and its risk control parameters. The company is supposed to
reveal the operating performance of its different businesses,
summarize its competition, position in the market, and point out
its competitive advantages.
(China Daily January 17, 2008)
