Economy, Business And Markets

TEDAN Targets Equity Market Transparency

Analyst at Securities & Exchange Organization
TEDAN Targets Equity Market TransparencyTEDAN Targets Equity Market Transparency

Securities & Exchange Organization of Iran hosted a high-level conference with representatives of almost every listed company on May 20 to introduce a brand-new procedure to publish financial statements.

Authorities announced publishers would be able to post their financial statements directly and without SEO’s interference on the so-called CODAL+ website. It was later decided to launch a new website named TEDAN as the publishers’ data analysis website, which is considered a state-of-the-art version of the CODAL+ with fancier visage and a handful of more features.

The new procedure will ensure more transparency in the market in terms of information symmetry and leakage prevention while reducing suspension periods for companies, all of which were long demanded by investors.

To put this in perspective, formerly the statements were handed in to SEO to be inspected by experts, which could take weeks at times before they were officially published and ready to be incorporated into investors’ analyses. This time-consuming process was always criticized and raised suspicions about insider trading and misuse of confidential information.

Since last month various statements have been posted on TEDAN promptly and directly, and SEO is now only responsible for post-release inspections. Moreover, in accordance with the publishers’ instructions, trading on a company will be automatically halted if there is a substantial change in profits. Authorities have guaranteed that with the new procedure in hand, suspensions will not take more than a week.

  Fundamental Analyses Incorporated

The focal point of the new website is the ability of entities such as financial advisors licensed by SEO to provide fundamental analyses on companies. The analyses are abstract and linked to the providers’ websites for more detailed information.

So far, 24 out of the 28 financial advisors can upload their analyses on the website, and seven of them have posted at least one analysis. This will bolster the analytical environment of the markets as investors will no longer act on rumors and will be less reliant on unprofessional and improper advisors. Moreover, the financial advisors will have the chance to prove their services worthwhile.

  IIIA’s Authority

As part of the new management of SEO’s policy of outsourcing services and granting authority to subsidiaries, the supervisory task of analyses is assigned to Iranian Institutional Investors Association to evaluate the accuracy and quality of analyses provided by the financial advisors.

The analyses are currently free but in the near future there will be a charge to encourage the financial advisors to deliver more coherent and comprehensive analyses.

However, there are some setbacks as well. TEDAN’s page views are not abundant, which means it is yet anonymous to most investors. In addition, the advisors have to pay fees to subscribe to IIIA, which is an unpleasant obligation.

After the stage was set, two weeks ago the first analyses was posted online on Isfahan’s Mobarakeh Steel Company and by now  dozens of other analyses are available. Market participants’ sentiment toward this new development has been positive.