CSRC Regulates Disclosure of Financial Information by Pilot Innovative Red-chip Companies on Sci-tech Innovation Board

The China Securities Regulatory Commission ("CSRC") has recently issued the Rules for the Information Disclosure and Compilation of Companies Publicly Offering Securities No.24— Special Provisions on the Information in Financial Statements of Pilot Innovative Red-chip Enterprises on the Science and Technology Innovation Board (the "Provisions"), immediately effective from the date of issuance.

The Provisions state that, financial statements disclosed by red-chip enterprises may be prepared under the China's Accounting Standards for Business Enterprises or other accounting standards equivalent to the China's Accounting Standards for Business Enterprises that are recognized by the Ministry of Finance ("MOF"); alternatively, they could be prepared in accordance with the International Financial Reporting Standards or the US Generally Accepted Accounting Principles, and the information about adjustments to differences made under the China's Accounting Standards for Business Enterprises shall be provided as well. In addition, the Provisions clearly state that, a red-chip enterprise shall expressly indicate the type of accounting standards it adopts for information disclosure in its financial statements. Where a red-chip enterprise prepares it financial statements under the China's Accounting Standards for Business Enterprises when it applies for an initial public offering or for issuing depository receipts, in China, it is disallowed to change the accounting standards it has adopted after going public domestically. Furthermore, the Provisions require that in publicly offering stocks or depository receipts in China, a red-chip enterprise shall clearly specify the accounting period in its arrangements for issuance and listing and cannot change that once the accounting period is determined.



(Source: http://www.csrc.gov.cn/pub/zjhpublic/zjh/201903/t20190308_352002.htm)

Note: The link to the Chinese official website of the document is for your reference.