The Stock Exchange's new disclosure model requires a "summary of information"
All transformations in the realm of development and modernization must aim for the better, delivering a genuine qualitative leap that positively reflects on the level of the targeted service being developed.
Regarding the file of disclosures issued by companies, the transition to the “XBRL” system, or eXtensible Business Reporting Language, was recently implemented. This is an international digital standard for converting financial statements and business disclosures from traditional text files (such as PDFs) into structured data that computers can easily read and analyze. The fundamental goal is to increase transparency. However, despite the trial being preceded by a deadline and a preparatory period, its implementation has proven to require further calibration, better organization, and clearer prioritization to maximize benefits for shareholders.
Initially, observers complain about the excessive number of useless fields, and reference numbers and dates that obscure the “essence of the disclosure” within their details.
Some companies recently disclosed historical announcements in the merger file, repeating old disclosures in place of the new disclosure containing the core information, and then submitted a supplementary disclosure carrying the same content.
The disclosure file, as stipulated by the regulations, must be clear and in understandable language. Yet, some issues are still announced in purely legal language, making it difficult to determine the ruling in favor of which party against whom.
Furthermore, some companies deliberately complicate reminding shareholders of the ruling’s value. In one recent ruling, the company avoided mentioning the ruling’s value, despite it being the most important piece of information in the disclosure, and merely referred to the date of the previous disclosure, forcing shareholders and page visitors to go through the trouble of returning and searching for the ruling’s value. Notably, the company would suffer no harm from announcing the value of a ruling issued in its favor.
Disclosures from some companies specify the parties to the lawsuit in a sequential narrative format, without clarifying who the plaintiff and who the defendant are. The disclosure states that the ruling was in favor of the first or second defendant, even though they are disputing parties, and it remains unclear who is the defendant and who is the plaintiff.
The demands of the mass of investors are that the new disclosure be direct and clear, containing an accurate summary, similar to markets in the region that attach a brief summary titled “Disclosure Summary.”
The new disclosure and the core information should lead the disclosure, rather than historical disclosures taking precedence first, followed by the new core information.
Additionally, there is an overabundance of numbers, references, dates, and fields presented before entering into the disclosure or core information.
The color-coding system for disclosures should also be utilized, where the new disclosure, for example, carries a green indicator, while previous historical disclosures carry a red indicator.
Disclosure pages must also be enhanced, characterized by the highest degrees of flexibility and ease of access to information. Some files open with difficulty, and attempts to display attachments fail in others.
The scattering of investors due to a high volume of successive disclosures, resulting from errors and amendments—some of which are very late—must be avoided. One example occurred in the first half of the year, where a model was amended approximately 10 days later.
Disclosures should be reinforced with correct and comprehensive information in one go, without fragmenting the disclosure. It has been frequently observed that incomplete disclosures open the door to rumors, prompting inquiries and the submission of supplementary disclosures. This causes confusion among investors and errors simultaneously, as followers struggle to track subsequent and supplementary disclosures, especially when they occur in the same session.
