What Is an Ad Hoc Report?

The interim report refers to the information that a listed company needs to disclose to investors and the public when a major event occurs in accordance with relevant laws, regulations and rules, and is an important part of the listed company's continuous information disclosure obligations.

Interim reporting system

Interim report means

The shortcoming of the periodic report system is that the information disclosure is lagging behind, and it cannot meet the latest and promptness of company information disclosure in time. Especially in companies

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The interim reporting system of listed companies mainly involves two aspects: one is the disclosure standard; the other is the disclosure review process.

1. Disclosure standards

There are two main disclosure standards for interim reports: one is the importance standard; the other is the timeliness standard. The former measures what kind of events a listed company must disclose, and the latter solves when the listed company should disclose when a major event occurs.

Determining appropriate and clear materiality standards has always been the ideal of securities legislation in various countries or regions, but this task is not easy. On the one hand, whether the information is important is relative. The occurrence of a specific event is different for different subjects due to their size, profit, assets, nature of commercial operations, and other factors. On the other hand, there is also a balance problem in determining materiality standards. That is, materiality standards must not only enable listed companies to disclose all the information that investors need to make reasonable investment decisions, but also not to flood the market with too much noise. Judging from practice, there are two criteria for determining the importance of major overseas securities markets: one is the criterion that influences the decision of investors. According to this criterion, whether a matter is important depends on whether it affects the decision of the investor; the second is the stock price. Sensitive standards, according to which whether an item is important depends on whether it will affect the price of listed securities.

The United States adopts a relatively broad double standard system for materiality standards, that is, "influencing investor decisions" and "influencing the price of listed securities markets" are both used as the criteria for determining the importance of information. One of the two constitutes a major event, and the obligation to disclose information is immediately incurred. Japan adopts investor decision criteria to define importance, and defines important information as "the fact that any severe punishment of management, operation, and property of a listed company that affects investors' decisions". The UK, Germany, France, Hong Kong, and Taiwan use price-sensitive criteria for materiality.

Timeliness means that listed companies should disclose relevant important information without hesitation in accordance with law. From the perspective of a listed company, timely disclosure of important information can enable the company to notify the market of major events and changes in a timely manner, so that the company's stock price can be adjusted in accordance with new information in a timely manner to ensure the continuity and effectiveness of the securities market; See, timely disclosure enables investors to make rational investment decisions in a timely manner based on the latest information, avoiding losses due to ineffective information; from the perspective of social supervision, timely disclosure can shorten the time of the information in the undisclosed stage and shorten the possibility of insiders The time to conduct insider trading reduces the difficulty and cost of supervision. Based on the above considerations, timely disclosure by major overseas securities markets is a basic requirement for interim reporting by listed companies.

2. Disclosure review process

According to the listing rules of the stock exchange and relevant listing agreements, the review of the interim reports of listed companies is mainly carried out by the stock exchange, and listed companies also need to report to the regulatory authorities when certain major events occur. There are two modes for the review process of the temporary reports of listed companies by major overseas market stock exchanges:

One is after-the-fact review. Listed companies immediately disclose information when major events occur, and report to the stock exchange and the competent authority at the same time.

One is the pre-examination. In the event of a major event, a listed company must disclose it to the stock exchange for review before it can be publicly disclosed.

Both models have advantages and disadvantages. The advantage of prior review is that the stock exchange can better judge the degree of significant impact of the information, so as to choose the best time and method for information disclosure and take reasonable measures such as suspension of transactions, but there are weaknesses such as low efficiency and high regulatory costs, and The time lag of information disclosure is long. Post-hoc review is just the opposite. It has the advantages of high efficiency, low regulatory costs, and more timely disclosure, but it is not easy to control the risk of irregular disclosure of major information beforehand. The Hong Kong Stock Exchange adopts a "pre-examination of some matters and post-examination of some matters", that is, for matters within the general requirements, listed companies can directly disclose on designated newspapers or designated websites, and For transactions and related transactions, listed companies need to submit preliminary draft announcements to the Stock Exchange, which will be reviewed and revised in accordance with their opinions and published on newspapers or websites. Therefore, the disadvantages of the two models can be better avoided, and they can be used for reference. value.