The head of the Supervisory Board of the Moscow Exchange proposed to apply the “explain or disclose” principle to public companies

Chairman of the Supervisory Board of the Moscow Exchange Sergei Shvetsov said that public companies should “clearly” explain to the Bank of Russia or the exchange why they refuse to disclose information about themselves. Mr. Shvetsov suggested applying the “explain or reveal” principle to such cases. The head of the supervisory board of the Moscow Exchange made a similar proposal at a meeting of the council for the development of the financial market under the Federation Council.

November 28 government extended until July 1, 2023, the period of validity of the right of stock market participants to partially or completely not disclose corporate information. The “comply or explain” principle is used in corporate governance, and the Central Bank recommends that companies use it when implementing best practices in this area.

“Either the exchange or the Central Bank as a regulator should receive a clear explanation from public companies why this or that information is not disclosed, and the explanations really should be clear, otherwise we will just come to July with another desire of public companies to extend this information hunger,”— Sergey Shvetsov said (quote from “Interfax”).

He noted that information is an important part of the capital market, and expressed regret that the moratorium has been extended for another six months. In this case, someone should control the “comply or explain” principle, Mr. Shvetsov also said.

Government in March as a measure “to protect stock market participants from possible sanctions from unfriendly states” allowed issuers not to disclose information “in part or in full”. The Central Bank explained that such a right “possesses any issuers of securities, companies independently assess the sensitivity of information in documents.”

Maria Fedotova