The Securities and Exchange Organization has ordered listed banks and credit institutions to incorporate data on investment in shares and bonds in their monthly financial reports.
Prior to this they were obliged to include data only about the lending and deposits in the reports, according to the Securities and Exchange News Agency.
“The decision is in line with promoting transparency and quality of data of listed companies,” Saeed Vesheqani, head of the SEO Supervision Department was quoted as saying by IRNA.
“With changes in the financial reports of banks, improvement in their performance and transparency is expected,” he added.
Out of the 32 banks and credit institutions in Iran, 18 are listed with the Tehran Stock Exchange and the junior equity market Iran Fara Bourse.
Improving financial transparency is slowly but steadily getting on top of the do-list of authorities. With deep recession plaguing the stock market, Majid Eshqi, the SEO boss, has emphasized the role and significance of transparency to restore the trust of millions of investors.
Vesheqani said obliging banks to rethink their financial reports will be extended to other sectors. “We have plans to improve financial transparency of a broad range of listed companies”.
In the recent past, the stock market regulator took other measures to improve transparency but observers say it is not enough and that there is a long way to go to create a fully transparent market.
Capital market authorities say transparency in financial reporting is crucial in a market that has grown both in the number of investors and the number of listed companies, which now surpasses 700 firms.
The capital market has come under strong criticism in recent years for poor transparency laws, which among other things, have created and nurtured insider trading. One major sticking point is that companies often refuse to divulge important financial information, or, at best, delay publishing data by months and sometimes years.
Earlier, the SEO obliged all listed companies to make public their real estate holdings. In July, the stock market regulator instructed listed companies to publish their earnings per share (EPS) at regular intervals.
EPS is calculated as a company's profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability. EPS is a widely used metric to estimate corporate value.
Highlight: The capital market authority has come under strong criticism in recent years for poor transparency laws, which among other things, have created and nurtured insider trading
