Japan Exchange Group Inc. has decided to scrap a plan to adopt tougher disclosure rules, saying the nation’s companies are getting better at communicating with investors on their own.
The exchange will seek clearer comments on an individual basis and keep track of companies’ responses, according to Taisuke Maruo, a senior manager in the listing department at the Tokyo Stock Exchange, JPX’s cash equities trading venue. The TSE had said in July it was looking to come up with new rules by the end of 2013, after Kawasaki Heavy Industries Ltd. issued conflicting statements on merger talks with a competitor.
“We’ve been asking listed companies to disclose more on important matters when we consider it necessary,” Maruo said in an April 4 interview. The TSE is satisfied with the improvement seen since the middle of last year and companies have received “passing marks” on almost all of their important disclosures, he said.
TSE listees have been urged by the exchange, the world’s third-biggest, to improve communication when responding to media reports that reveal a company has done, or is about to do, something that might affect its share price. The push follows complaints from overseas investors over unclear or incomplete disclosure.
The exchange will next month begin alerting investors via its website to media reports it deems sensitive enough to warrant a response from a company, said Maruo.
The practice of offering stock comments such as “nothing’s been decided yet” in cases where disclosure could influence investment decisions has almost completely stopped, he said.
In the case of Kawasaki Heavy, the nation’s second-biggest maker of heavy machinery, the TSE warned, but didn’t penalize, the company over its contradictory releases.
The Financial Service Agency’s said in a report in December 2012 that guidelines should be considered to require companies to disclose information in a clearer manner.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.