On December 27th, the China Securities Regulatory Commission (CSRC) publicly solicited opinions on the "Management Regulations on the Suspension and Exemption of Information Disclosure of Listed Companies" (hereinafter referred to as the "Management Regulations"). This is the first time that the CSRC has systematically and comprehensively issued special regulations to regulate the suspension and exemption of information disclosure of listed companies and other information disclosure obligors, and protect the legitimate rights and interests of investors. Specifically, the "Management Regulations" clarify two categories of exemption matters and three exemption methods. At the same time, in order to protect investors' right to know, listed companies are required to carefully determine the suspension and exemption of disclosure related matters. A unified regulatory document helps to balance the principles of openness and confidentiality, enhance the systematicity and comprehensiveness of rules, protect the legitimate rights and interests of investors, and also contribute to maintaining the order of information disclosure of listed companies Tian Lihui, Dean of the Institute of Financial Development at Nankai University, stated in an interview with reporters that the "Management Regulations" provide clear information disclosure exemption guidance for listed companies, which helps companies to protect trade secrets and state secrets while complying with regulations. By regulating the exemption of disclosure behavior, investors' right to know is protected, ensuring that they can obtain necessary information to make investment decisions. In addition, regulatory authorities will strengthen supervision on the suspension and exemption of information disclosure, which will help improve market transparency and maintain market order. Previously, some regulatory rules of the China Securities Regulatory Commission and the Stock Exchange's "Stock Listing Rules" provided for a suspension and exemption system for information disclosure, balancing the principles of openness and confidentiality. In practice, several A-share listed companies have established information disclosure suspension and exemption management systems (hereinafter referred to as the "information disclosure exemption system"). From the announcements of listed companies, it can be seen that since 2016, A-share listed companies have successively released and updated the exemption system for letter of credit. According to incomplete statistics from reporters, as of December 29, 2024, over a thousand listed companies have issued letter exemption systems. From a practical perspective, the suspension and exemption of disclosure mainly involve some high-tech and trade secret sensitive companies. This helps to strengthen the protection of state secrets and trade secrets Cheng Peng, Secretary of the Board of Zhejiang Weiming Environmental Protection Co., Ltd., stated. From the perspective of exemption matters, the Management Regulations specify that two types of information can be temporarily suspended and exempted from disclosure: state secrets or other information that may violate national confidentiality requirements after being made public, and trade secrets or confidential business information (collectively referred to as "trade secrets"). From the perspective of exemption methods, the Management Regulations specify that suspension and exemption include three forms: suspension of disclosure of temporary reports, exemption of disclosure of temporary reports, exemption of disclosure of regular reports, or relevant content in temporary reports. For trade secrets, the Management Regulations also list three situations where disclosure can be exempted. However, if there are situations such as suspension or elimination of exemption reasons, listed companies and other information disclosure obligors should disclose trade secrets in a timely manner. Compared to the previous regulations on suspension and exemption of information disclosure by the exchange, Cheng Peng stated that the scope of application of the "Management Regulations" is more clear this time. In addition to listed companies, confidentiality requirements are also imposed on shareholders and other information disclosure obligors of listed companies; Emphasis was placed on confidentiality requirements for more channels, including non statutory disclosure media; Further refine the description of situations that belong to trade secrets and clarify how sensitive information can be desensitized and disclosed. Professor Zheng Yu from the School of International Finance Law at East China University of Political Science and Law told reporters that the "Management Regulations" have raised the compliance requirements for the suspension and exemption of information disclosure to departmental regulations, significantly improving the regulatory effectiveness. From the content perspective, the "Management Regulations" have more complete provisions, from the applicable conditions for suspension and exemption to the action norms for information disclosure obligations, and then to the punishment standards for violations of regulations, forming a complete administrative supervision loop; In addition, the Management Regulations also refine the specific conditions and standards for suspension and exemption, and provide specific requirements and guidance for compliance after disclosure in accordance with the law or regulations. Emphasizing the principle of disclosure to prevent the abuse of exemption rules. In addition to clarifying exemption items and methods, the Management Regulations also specify that listed companies and other information disclosure obligors should truthfully, accurately, completely, timely, and fairly disclose information, and shall not abuse deferred or exempted disclosure to evade information disclosure obligations or mislead investors. In order to prevent the abuse of exemption from disclosure, the "Management Regulations" start from both internal and external aspects. On the one hand, it strengthens internal management, consolidates corporate responsibility, requires listed companies to establish disclosure exemption systems, clarify internal audit procedures, and be reviewed by the board of directors; When requesting listed companies to implement exemptions, they should follow internal audit procedures and register and manage the exemption disclosure matters. On the other hand, strengthening external supervision requires listed companies to regularly submit trade secret registration materials to the local securities regulatory bureau and stock exchange, while clarifying the relevant legal responsibilities for violating regulations. Tian Lihui stated that the "Management Regulations" prevent the abuse of exemption disclosure by implementing measures to strengthen corporate responsibility and external supervision, which is a comprehensive and effective management strategy. Requesting listed companies to establish and implement strict internal audit procedures to solidify corporate responsibility helps ensure the reasonableness and legality of exempt disclosure matters. At the same time, by requiring listed companies to regularly submit relevant materials to strengthen external supervision, the regulatory authorities' ability to supervise exempted disclosure matters has been enhanced, which helps to timely detect and handle violations, thereby protecting investors' right to know and market fairness. The Management Regulations not only specify the conditions for the suspension and exemption of information disclosure, but also emphasize the irreplaceable 'baton' role of information disclosure in the capital market Zheng Yu stated that the "Management Regulations" convey three major regulatory principles: first, the principle of truthful, accurate, complete, timely, and comprehensive disclosure, with exceptions for suspension and exemption; The second is to require the obligor of information disclosure to disclose as much information as possible, except for those involving state secrets or specific trade secrets, such as through desensitization labeling, even in cases where suspension and exemption are exceptions; The third is to emphasize that illegal activities such as insider trading, leaking insider trading, and market manipulation should not be carried out using information that is exempted from disclosure or temporarily suspended from disclosure. These are all necessary means to maintain fairness in information disclosure and trading in the capital market. For listed companies, Cheng Peng stated that the "Management Regulations" further clarify the management requirements for suspending or exempting information disclosure matters of listed companies, enhance operability, and help improve the management awareness of listed companies regarding matters involving national security and commercial secrets. Listed companies need to strike a balance between disclosure and confidentiality requirements, and ensure necessary confidentiality of their sensitive information during the development process. (New Society)