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SEO Modified Three Regulations to Increase Transparency

Deputy of Supervision on issuers and exchanges, Hassan Amiri, communicated three modified regulations including regulation on disclosure of information by issuers, regulation on securities listing and offering and regulation governing trades mechanism in Tehran Stock Exchange and Iran Fara Bourse

Deputy of Supervision on issuers and exchanges, Hassan Amiri, communicated three modified regulations including regulation on disclosure of information by issuers, regulation on securities listing and offering and regulation governing trades mechanism in Tehran Stock Exchange and Iran Fara Bourse.

The modifications aim to facilitate the process of suspension and reopening of ticker symbols and take more rigorous measures against issuers delaying or refusing disclosure of their required financial reports or material none-public information.

“There will be more instances for ticker suspension but the suspension periods will be much shorter and any issuer neglecting to provide required reports will face tougher disciplinary sanctions”, Amiri mentioned.

These three regulations will enter executive phase as soon as the technical infrastructure is provided in collaboration with Tehran Stock Exchange (TSE), Iran Fara Bourse (IFB), Central Securities Depository of Iran (CSDI) and Tehran Securities Exchange Technology Management Company (TSETMC).

Amiri explained the major changes in each regulation. “As required in the modified version of the regulation on disclosure of information by issuers, the issuers are no allowed to publish their projected revenues for the next fiscal year”, he noted. This will refrain companies from publishing promising projected revenues and earnings and then announcing worth than expected outcomes.

Moreover, the management of each listed company is required to publish their quarterly and annual financial report accompanied by an explanatory report. The guidelines for this newly introduced report is said to be published in the coming days.

He also explained that the number of cases when a piece of information is counted as material has also increased to 65 for each of which a particular form is designated to assist issuers with better complying. The ticker symbol of the issuer will be shortly suspended, every time a piece of material information is announced.

Amiri continued with the regulation on securities listing and offering. The issuers’ ticker symbol will be brought to a halt if they do not comply with the requirement in the listing and offering regulation or fail to publish financial reports on a timely manner as well as having negative profitably for two consecutive years. Then the ticker symbol will be labeled but the trading will continue until deadline, after which the issuer will enter listing cancelation process.

“As of today 32 companies listed in TSE and 5 companies listed in IFB are subject to cancelation process”, Amiri revealed. Board of listing admission will decide their fate in the coming month.

The regulation governing trades mechanism in Tehran Stock Exchange and Iran Fara Bourse also face long-demanded changes. If a company’s share price moves more than 20% within five trading days, the ticker will be suspended and the issuer is obliged to provide clarification. The ticker will be reopened the next trading day. The other scenario is when the share price moves more that 50% within 15 trading days. Then the issuer is obliged to have a press conference to clarify and the ticker will reopen within the next two trading days.

Price fluctuation after reopening to be limited or not depends on the category the announced material information falls under.

The deputy suggested that the new amended regulations is aimed to help transparency of issuers and liquidly of share in the markets.