cryptocomnftgames| China Securities Association issues guidelines to standardize analyst behavior and improve the quality of bidding reports

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Guidelines issued by the China Securities Association

Standardize the behavior of analysts and improve the quality of bid report

◎ reporter Tang Libin

The Securities Association of China issued the guidelines on the behavior of Securities companies in providing Investment value Research reports (hereinafter referred to as "guidelines") on May 24 to further standardize the practice of securities companies in providing investment value research reports (hereinafter referred to as "bid reports"). Improve the quality of bidding reports and protect the legitimate rights and interests of investors. The guidelines shall be implemented as of the date of promulgation.

The China Securities Association said that with the full implementation of the registration system reform, the bid report plays a more and more important role in stock issuance and underwriting, and has become an important reference material for offline investors to judge the investment value of issuers. However, in the process of business development, it is exposed that the quality of bidding reports is not high, the prediction deviation of some bidding reports is large, and the independence of analysts is not enough, which is in urgent need of standardization.

The "guidelines" issued this time set a total of 23 articles, set up the basic principles that securities companies should follow in making and providing bidding reports, establish and improve corresponding internal management systems, entrust parent companies or subsidiaries to write bidding reports, and write bidding reports for members of underwriting groups, analysts cross-wall management, and prohibit influencing or interfering with analysts' independent judgment. It is forbidden to divulge the views and contents of the bid report.

The guidelines make it clear that securities companies shall abide by the basic principles of independence, objectivity, professionalism, prudence, fairness and integrity in providing bid reports; strengthen compliance management of securities analysts and investment banking business personnel, securities issuance and underwriting personnel, and issuers, to prevent conflicts of interest; and ensure the independence of securities analysts in writing bidding reports.

The guidelines propose that if more than one securities company writes a bid report, the company should independently complete the production of the bid report, and prohibit the discussion of investment analysis such as profit forecast and valuation before providing it to offline investors.

The guidelines require that, except in individual cases, in the process of writing bid reports, it is forbidden for securities analysts and investment banking departments, securities issuance and underwriting departments, issuers and other personnel to discuss the contents of investment analysis, such as profit forecasts and valuation of bid reports, as well as the scope of issuance pricing, through individual or joint meetings, seminars, and other offline and online meetings.

The guidelines also require that the profit forecasts and valuation conclusions of the bid report should be judged independently by securities analysts. Stakeholders such as investment banking departments, securities issuance and underwriting departments, and other departments and personnel within the company shall not exert pressure on securities analysts for the purpose of influencing or interfering with earnings forecasts and valuation conclusions.

The guidelines propose that after the bidding report has been written and the examination procedures such as quality control and compliance review have been carried out, the research department shall provide it to the securities issuance and underwriting department, and then the department shall provide it to offline investors in accordance with the requirements or procedures of the stock exchange. At the same time, securities analysts and personnel engaged in quality audit and compliance review of bidding reports shall not disclose the contents of bidding reports to the public in the process of writing bidding reports.

In terms of regulating analysts' participation in roadshows, the guidelines make it clear that securities analysts are not allowed to conduct project roadshows for investors who intend to participate in strategic placement before the publication of the initial public offering letter of intent. If securities analysts need to enhance their understanding of the issuer and their industry, they may attend the roadshow promotion by the issuer and the lead underwriter to the investors who intend to participate in the strategic placement, but shall not express their opinions and opinions, and legal advice shall be provided by a witness lawyer hired by the lead underwriter.