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The Shanghai and Shenzhen Stock Exchanges officially issued the "Detailed Rules for the Repurchase of Listed Companies"

January 11, 2019 18:02
source: Shanghai and Shenzhen Stock Exchange

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Summary
[Shanghai and Shenzhen Stock Exchange officially issued the "Detailed Rules for the Repurchase of Listed Companies"] Today, on the basis of the preliminary public consultation, the Shanghai Stock Exchange and the Shenzhen Stock Exchange officially issued the "Detailed Rules for the Repurchase of Listed Companies" (hereinafter referred to as "Repurchase" Rules)). (Shanghai and Shenzhen Stock Exchange)

  Implement the company law revision decision to improve the stockRepoSystem - Shanghai Stock Exchange officially issued the implementation of the repurchase rules

Today, on the basis of the preliminary public consultation, the Shanghai Stock Exchange officially released the implementation ofListed company repurchase shares implementation rules(hereinafter referred to as the "Repurchase Rules"). At the same time, in order to implement the relevant institutional arrangements for the Repurchase Rules, the Shanghai Stock Exchange has simultaneously issued revised share repurchase relatedannouncementFormat guidelines. On the one hand, this revision of the "Repurchase Rules" is aimed at implementing the company law revision decision, the CSRC and relevant ministries and commissions on supporting the spirit and requirements of the listed companies to repurchase shares, and giving full play to the system function of share repurchase; By increasing the share repurchase situation, broadening the sources of repurchase funds, and appropriately simplifying the implementation procedures, the listed companies will be more flexible and convenient to implement the share repurchase “pave the way”. At the same time, aiming at the possible violations of laws and regulations, the establishment of a dual prevention mechanism combining market constraints and regulatory interventions will ultimately promote the formation of a long-term, win-win and sustainable market mechanism.

  First, fully listen to opinions and actively respond to market concerns

According to the relevant person in charge of the Shanghai Stock Exchange, in the process of soliciting opinions from the market in the early stage, more than 50 valid feedback emails and letters were received from various market entities such as investors, listed companies and securities companies. The feedback mainly focused on the reduction of repurchased shares, the change in the use of repurchased shares, the arrangement of new and old rules, the source of repurchase funds, the proposal for repurchase, and the disclosure of repurchase matters. In addition, many mainstream financial media and self-media have also followed the "Repurchase Rules" after the announcement of the draft. Most voices believe that the "Repurchase Rules" are tightly combined and relaxed, which improves the convenience and autonomy of listed companies to buy back shares. At the same time, the market parties have also put forward many pertinent comments and suggestions for revision. After the end of the consultation period, the Shanghai Stock Exchange attaches great importance to and carefully studies, discusses feedbacks one by one, adopts and absorbs reasonable opinions and suggestions, and further optimizes and improves the “Repurchase Rules”.

  Second, strengthen the restraint mechanism and improve the system of sale of repurchased shares

According to the relevant person in charge of the Shanghai Stock Exchange, the institutional arrangements for the repurchase of shares can be sold. This is a problem that the market and investors pay more attention to and discuss more. Some feedbacks and media reports worry that the practice of hiding arbitrage space will cause the company to buy low and sell high, and to raise the problem of controlling stock price and profitability of stocks. Therefore, it is believed that the repurchased shares should be completely cancelled and cannot be sold. However, there are also many opinions that in order to open up the institutional space for repurchase, the repurchased shares should be allowed to circulate in the secondary market, but special instructions and restrictions are required. There are also opinions that the repurchased shares can not only be reduced, but also need to further increase the diversity of the method of reducing holdings, and increase the reduction of holding methods such as agreement transfer and targeted transfer.

Regarding this issue, relevant industry insiders said that the company can maintain the value of the company andshareholderThe repurchase of rights and interests is an important repurchase situation newly added in the revision of the Company Law. On the one hand, the company's stock price has broken net or has fallen sharply by more than 30% in the short term, often resulting from large fluctuations in the market, which is difficult to predict in advance. On the other hand, in the short-term, the company raises funds to implement repurchase, which can avoid continuous irrational decline in stock prices, but it may also lead to occupation of production and operation funds and face relatively large financial pressure. Under this circumstance, allowing the sale of the repurchased shares through the secondary market in the later stage can alleviate the company's worries to a certain extent, and help the company's board of directors to make quick response and decision-making, and maintain the company's value and shareholders' rights in a timely manner.

From this perspective, the repurchase to maintain the company's value and shareholders' equity is a "semi-passive" repo in a special case, which is different from the repurchase in other situations. Allowing the sale of the repurchased shares in this situation can provide them with more flexible market-oriented means, which will help these companies to better balance the capital repurchase and production and operation capital requirements in an emergency. Try to encourage the necessary system for share repurchase. At present, the CSRC issued on November 20, 2018, the "Notice on Seriously Studying and Implementing the Decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China", Article 2 (4) It is stipulated that “shares repurchased to maintain the company’s value and shareholders’ rights may be sold through centralized bidding after fulfilling the pre-disclosure obligations in accordance with the conditions and procedures stipulated by the stock exchange.” According to the provisions, the Repurchase Rules clarify the specific conditions, procedures and pre-disclosure of the company's sale of the repurchased shares.

The reporter noted that in the specific system design, in order to prevent possible violations of laws and regulations such as “market manipulation” and “improper arbitrage”, the Shanghai Stock Exchange has made a comparison in the draft for the sale of repurchased shares through the secondary market. Strict restrictions, including the expiration of the holding period of 6 months, the period of sensitive information window can not be reduced, the daily reduction of the number limit, the reduction of price declaration restrictions and pre-disclosure and other five requirements. The officially released "Repurchase Rules", based on the restrictions on the draft for comment, added four new restrictions on reduction and restraint, and made stricter constraints from multiple dimensions: First, it is required to "before words" The shares repurchased to maintain the company's value and shareholders' equity are intended to be used for future concentrated bidding. The company must clarify when the repurchase plan is disclosed. Otherwise, it may not be changed for sale. Second, it will be repurchased. The holding period before the shareholding reduction is extended from 6 months to 12 months; the third is to control the reduction of the pace according to the new regulations of reduction and reduction, requiring that the amount of reduction in any consecutive 90 days should not exceed 1% of the total share capital to reduce The impact on the secondary market; Fourth, the company is required to use the funds from the reduction of the company's main business.

In addition, the reporter learned that the company can not actually use the sale of repurchased shares to manipulate profits, after the market related concerns may not be necessary. Because according to the relevant provisions of the "Accounting Standards for Business Enterprises", the repurchase, sale or cancellation of shares should be treated as changes in equity, and the fair value of equity instruments should not be recognized. If the proceeds from the sale of the repurchased shares of the company are higher than the original repurchase cost, the difference shall not be included in the current profit and loss and shall be included in the capital reserve as an equity transaction. With the aforementioned institutional arrangements and constraints, it is not easy for the company to manipulate stock prices and arbitrage by selling repurchased shares.

  Third, strengthen the reduction of restrictions and disclosure obligations during the repurchase period of special entities, and prevent the opportunity to profit

The relevant person in charge of the Shanghai Stock Exchange also introduced that whether the special shareholders such as Dong Jiangao, the controlling shareholder, and the shareholders holding more than 5% of the shares can reduce their holdings during the repurchase period, whether or not to allow the reduction of holdings is also one of the key issues of concern to the market and investors. During the process of soliciting opinions, there are feedbacks that the repurchase system may become a tool to cover the reduction of specific entities and “cutting the leek”. They believe that the scope of restricted entities for share reduction during the repurchase period should be expanded, and the company should not be allowed to buy back. Its shareholders reduced their holdings.

In this regard, relevant industry insiders said that if the relevant shareholders are completely restricted in the repurchase period of all repurchase cases, it will not only dampen the enthusiasm of the company to buy back shares, but also does not meet the actual situation. In fact, in the consultation draft of the Shanghai Stock Exchange, in order to prevent repurchaseShareholder reduction"lifting the sedan chair" has been arranged. First of all, if the relevant shareholders of the listed company and Dong Jiangao reduce their shareholdings during the period of repurchase of shares by the listed company, they shall comply with the relevant provisions of the China Securities Regulatory Commission and the Stock Exchange on shareholding reduction; secondly, the company shall maintain the company's value and shareholders' equity. If a share repurchase is necessary, the above-mentioned specific entity may not reduce its shareholding in the repurchase period.

The reporter noted that the officially released "Repurchase Rules" further strengthened the relevant requirements for the reduction of specific shareholders from the information disclosure: First, the company repurchased to maintain the company's value and shareholders' equity, taking into account the first disclosure of repurchase matters. At that time, it may have a greater impact on the stock price. Therefore, the time limit for the reduction of the specific subject is moved forward to the time when the company first discloses the repurchase; the second is to further strengthen the major shareholder including the holding of more than 5% during the repurchase period. The obligation to reduce the disclosure requires the company to disclose to the director, the controlling shareholder, the actual controller, the proposer, and the shareholders holding more than 5% of the shares, whether or not there is a specific reduction plan when the company first discloses the repurchase of shares. The situation and the full reminder of the risk reduction according to the response.

  Fourth, standardize important matters such as changes in the use of repurchased shares, and prevent "fudge" repurchase

The relevant person in charge of the Shanghai Stock Exchange introduced that in the comments, some feedback pointed out that due to the rapid changes in the capital market and the constant changes in the external environment, the repurchase use disclosed by the company may undergo major changes. It is recommended to explicitly allow the company to change the use of the repurchased shares and increase flexibility. Considering that the company law has decided to extend the holding of the repurchased shares to three years, there is an objective need for the listed company to change the use of the repurchased shares. Therefore, the "Repurchase Rules" allow the company to have a legitimate cause and can The content of the repurchase program is changed. At the same time, many companies in the previous period disclosed multiple repurchase purposes in the repurchase program. They need to strengthen guidance and supervision to avoid arbitrary changes or termination of adverse effects and regulate the company's change behavior.

The reporter noted that the draft for comments has required the company to clearly disclose the quantity or amount of shares to be repurchased in the repurchase program, and to clarify that the upper and lower limits and the upper limit must not exceed one-fold of the lower limit. On this basis, the officially released "Repurchase Rules" also added a "negative list" for changing the use of repurchased shares. Specifically, it includes: First, if the repurchased shares are intended to be written off, they may not be changed to other uses; second, if the repurchased shares are intended for future sale, they shall be clearly defined and disclosed at the outset, otherwise they may not be sold. In the follow-up, the Shanghai Stock Exchange will focus on and supervise the company's change or termination of the repurchase program during the execution of the rules, and find that there are misconducts and correct them in time.

  V. Solve the needs of practice and make arrangements for the convergence of old and new rules

In order to ensure the smooth implementation of the "Repurchase Rules", in accordance with the applicable arrangements for the new and old rules, the notice of the rules issued by the Shanghai Stock Exchange has made corresponding provisions:

First, the rules for clear stock repurchase of shares are applicable. Where the repurchase plan disclosed before the implementation of the Repurchase Rules has not been implemented, the general regulations, implementation procedures and information disclosure requirements of the repurchase implementation shall be applied when the implementation of the new regulations is continued.

The second is to give the listed company a specific repurchase purpose for the three-month period of clear stock repurchase program. Before the implementation of the Repurchase Rules, many repurchase programs disclosed by listed companies included multiple uses but did not specify the specific circumstances. In order to clarify market expectations, the company should specify the number of shares or the total amount of funds to be repurchased for each purpose within 3 months.

In addition, it is understood that if the company fails to complete the repurchase due to compliance with the new regulations, it can extend the repurchase implementation period according to the new regulations to ensure that it has sufficient repurchase time to complete the repurchase, but it needs to fulfill the decision according to regulations. Procedure and information disclosure obligations.

  Sixth, do a good job in market services, give full play to the function of the repurchase system

The relevant person in charge of the Shanghai Stock Exchange said that the follow-up will adhere to the concept of equal emphasis on service and supervision, focus on policy consultation, rules interpretation, market training and other work on the "Repurchase Rules", and support and guide listed companies to carry out share repurchase according to law and compliance. Maintain corporate value and shareholders' equity. At the same time, the Shanghai Stock Exchange has also revised the guidelines for the relevant stock announcements of the stock repurchase in accordance with the “Repurchase Rules” to improve the friendliness of the rules and facilitate the company's preparation, disclosure of the repurchase plan, repurchase report, repurchase progress and results announcements.

The relevant person in charge of the Shanghai Stock Exchange also reiterated that it will strengthen the self-regulation of repurchase, prevent and seriously investigate and deal with violations of laws and regulations, such as profit transfer, insider trading, market manipulation, etc.New sharesThe positive effect of the repurchase system promotes the stable and healthy development of the capital market.

  Notice of the Shanghai Stock Exchange on the Implementation Rules for the Repurchase of Listed Companies of the Shanghai Stock Exchange

SSE Fa [2019] No. 4

Market participants:

In order to give full play to the system function of share repurchase, further standardize the behavior of listed companies to buy back shares, and earnestly safeguard the legitimate rights and interests of investors, according to the "Decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China" "Opinions on the Repurchase of Shares by the Company" "Notice on Seriously Studying and Implementing the Decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China", the Shanghai Stock Exchange (hereinafter referred to as the Stock Exchange) has formulatedShanghai Stock Exchange listed company repurchase shares implementation rules(hereinafter referred to as the "Repurchase Rules", see the attachment for details), it is hereby released and will be implemented as of the date of promulgation. In order to ensure the smooth implementation of the "Repurchase Rules", the notices on the connection arrangements applicable to the old and new rules are as follows:

1. Before the implementation of the "Repurchase Rules", the repurchase plan disclosed by the listed company has not been implemented. If the implementation of the "Repurchase Rules" is continued, the general provisions and implementation of the repurchase rules on repurchase implementation shall apply. Requirements for procedures and information disclosure.

2. Before the implementation of the "Repurchase Rules", if the repurchase plan disclosed by the listed company contains multiple uses but does not specify the specific circumstances of each use, it shall be in accordance with the "Return" within 3 months from the date of the release of the Repurchase Rules. The purchase rules stipulate the maximum number of shares to be repurchased for each use or the upper and lower limits of the total amount of funds, and the upper limit shall not exceed 1 time of the lower limit, and shall be disclosed in a timely manner after fulfilling the corresponding review procedures.

3. The “Guidelines for the Repurchase of Shares by Listed Companies on the Shanghai Stock Exchange (Revised in 2013)” (Shangzheng Gongzi [2013] No. 12) issued by the Exchange on March 29, 2013 was abolished at the same time.

Hereby notify.

Attachment:Shanghai Stock Exchange listed company repurchase shares implementation rules

Shanghai Stock Exchange

January 11, 1999

  Press spokesman of Shenzhen Stock Exchange issued a "Report on the Implementation Rules for the Repurchase of Shares of Listed Companies in Shenzhen Stock Exchange"

On January 11, the Shenzhen Stock Exchange revised and releasedShenzhen Stock Exchange listed company repurchase shares implementation rules》 (hereinafter referred to as “Repurchase Rules”) and “Announcement Formats Related to the Repurchase of Shares by Listed Companies” (hereinafter referred to as “Announcement Format”). The spokesperson of the Shenzhen Stock Exchange responded to questions from reporters on issues of concern to the market.

  Q: Please tell us about the main background of this Repurchase Rules.

A: Improving the institutional arrangements for the repurchase of shares of listed companies is an important achievement in the reform of the basic system of China's capital market. On October 26, 2018, the Standing Committee of the National People's Congress deliberated and passed the "Decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China" to improve the system of repurchasing shares, enrich the share repurchase situation, and simplify implementation. The purchase decision-making process and the establishment of the treasury stock system provide a legal basis. Since then, the CSRC, the Ministry of Finance, and the State-owned Assets Supervision and Administration Commission jointly issued the "Opinions on Supporting the Repurchase of Shares by Listed Companies" (hereinafter referred to as "Opinions"), and the CSRC issued "On the serious study and implementation of the Standing Committee of the National People's Congress on the revision of China. The Notice of the Decision of the People's Republic of China Company Law (hereinafter referred to as the “Notice”) further clarifies the specific measures to support the repurchase, and guides and regulates the listed company to implement share repurchase according to law.

The revision of the share repurchase system has given listed companies more autonomy, which has enabled the company to have more convenient and market-oriented choices in maintaining company value, safeguarding shareholders' rights and promoting long-term incentive mechanism, and is beneficial to raising listed companies. Quality, optimize investor return mechanism, and promote healthy and stable development of the capital market. According to statistics, from 2015 to 2018, there were more than 400 listed companies in Shenzhen, and the actual repurchase amount exceeded 40 billion yuan. Among them, after the revision of the Company Law, more than 100 companies have issued repurchase plans. The planned repurchase scale is about 20 billion yuan.

  Q: What is the general idea and main content of the Repurchase Rules?

A: In order to conscientiously implement the latest requirements of the share repurchase system, the Shenzhen Stock Exchange systematically sorts out the business rules related to the share repurchase of listed companies, and in accordance with the requirements of the above-mentioned laws and regulations, combined with daily regulatory practices, extensively listen to the opinions and suggestions of the market, fully demonstrated The analysis made a comprehensive revision of the “Guidelines for the Listed Companies of the Shenzhen Stock Exchange to Repurchase Shares by Central Auction” issued in 2008, and formulated the “Repurchase Rules”.

On the one hand, this revision will bring the contents of the new repurchase regulations one by one, and further clarify the situation of the repurchase of listed companies, procedures, methods, information disclosure, handling of repurchased shares, etc. It should fulfill its obligations to prevent violations of insider trading, market manipulation, interest transfer and securities fraud.

The main contents of this revision are as follows: First, broaden the application of repurchase shares, clarify the repurchase requirements for “necessities for maintaining company value and shareholders' equity”; second, simplify the repurchase review process for specific situations and regulate the proposal for repurchase of shares. The third is to refine the information disclosure and program change requirements of the repurchase shares, set the "crawling" repurchase terms; the fourth is to clearly identify the source of repurchase funds, the repurchase of shares to pay cash as the cash dividend; the fifth is to clearly "to maintain the company's value And shareholders' rights and interests are required to "repurchase shareholding reduction requirements and restrictions; sixth is to strengthen the daily supervision of repurchase shares, to guard against violations of laws and regulations.

  Q: Please tell us about the "Repurchase Rules" for comments. How is the opinion adopted?

A: On November 23, the Shenzhen Stock Exchange issued a draft of the “Repurchase Rules” for public comment. During the consultation period, the Shenzhen Stock Exchange collected opinions from all parties in the market in various ways, while paying close attention to media commentary. During the period, more than 50 opinions, suggestions and consultations were received from market entities such as listed companies, securities companies and small and medium-sized investors. In general, the market believes that the reform of the repurchase system is of great significance, which is conducive to the stable and healthy development of the capital market. There are also some market participants who worry that financing repurchase may increase the company's financial risk and allow the reduction of the repurchase of shares may cause the company to speculate on its own share price.

After thorough analysis and argumentation, the Shenzhen Stock Exchange absorbed some of the opinions and revised the "Repurchase Rules" accordingly. The details are as follows:

The first is the proposal that the shares repurchased for the purpose of maintaining the company's value and shareholders' rights must not be reduced. The "Notice" clarifies that the shares repurchased in the case of "necessary for the maintenance of company value and shareholders' rights" may be reduced after fulfilling certain procedures. The "Repurchase Rules" draft for comment has clarified the requirements and restrictions on the reduction of repurchased shares, and made strict regulations on the period of restricted sales, reduction of holdings, reduction of pre-disclosure, reduction of progress in disclosure, and reduction of holdings. In order to further strengthen the constraints and restrictions on reduction, after fully considering the market opinions, the Repurchase Rules will extend the period of restricted sales from “six months” to “12 months” and increase “in any 90 consecutive natural In the day, the total number of shares reduced may not exceed 1% of the total number of shares of the company.

The second is about the proposal to not repurchase shares through debt financing. The "Repurchase Rules" has required the company to clarify the source of funds for the repurchase of shares in the repurchase program, and stressed that "the board of directors should pay full attention to the company's financial status, debt performance and ability to continue operations, and carefully formulate and implement the plan for repurchase shares. The number of shares repurchased and the size of the funds should match the actual financial status of the company." The listed company should repurchase the internal management system, fully consider the capital situation, and reasonably implement the share repurchase to ensure that the share repurchase does not harm the listed company's debt performance and ability to continue operations.

The third is about the proposal of the proponent of the repurchase program. Some people believe that the definition of the repurchase plan proposer is not clear, which may lead to individual shareholders speculating the stock price of listed companies and increasing the operating costs of listed companies. The "Repurchase Rules" fully absorbs the opinions of the market and clarifies the proponent as "proposers who have the right to propose proposals according to relevant laws and regulations and the company's articles of association" to prevent the "fudge" proposal from misleading investors.

Fourth, it is recommended that the repurchase of B shares should not be applied to the “crawling” repurchase clause. Some people think that the "crawling" repurchase clause is too restrictive, and the B-share may not apply the "crawling" repurchase clause. In order to guide listed companies to reasonably control the pace and quantity of repurchase and avoid affecting the normal order of the secondary market, the “Repurchase Rules” set “the number of shares repurchased every five trading days, not exceeding the top five of the date of the first repurchase of shares. In the case of "crawling" repurchase requirements of 25% of the company's stock trading volume on the trading day, except for the "necessary for the maintenance of company value and shareholders' equity", the repurchase shares in other cases shall implement the "crawling" clause. Taking into account the objective situation of incomplete B-share transactions and low transaction volume, the exception clause of “repurchase of B-shares in principle in accordance with the provisions of the preceding paragraph and failure to comply with the provisions of the preceding paragraph shall be fully disclosed and reasonable” To improve institutional flexibility.

  Q: The "Repurchase Rules" has added "a necessary condition for maintaining the company's value and shareholders' rights." In this case, the shares repurchased can be reduced, and some investors are worried that the listed company may manipulate the stock price and adjust the profit. In this regard, can you introduce the relevant institutional arrangements for the "Repurchase Rules"?

A: "Required for the maintenance of company value and shareholders' rights" There are strict conditions for the repurchase of shares. The listed company must satisfy "the company's stock closing price is lower than its latest net assets per share" or "for 20 consecutive trading days." The company's stock closing price has dropped by 30%, and the board of directors reviewed the repurchase program within 10 trading days from the date of the fact or within 10 trading days from the date of receiving the repurchase proposal, and completed the implementation within three months. . During the implementation of the repurchase, the listed company Dong Jiangao, the controlling shareholder, the actual controller, the repurchase share proposer and their concerted actions may not directly or indirectly reduce the company's shares to prevent the transfer of interests.

At the same time, the "Repurchase Rules" impose strict regulations on the reduction of the repurchased shares of listed companies. The shares repurchased by the listed company “necessary for the maintenance of the company's value and shareholders' rights” must meet certain conditions before they can be sold through centralized bidding. Specifically, the repurchase plan must clearly disclose the number of shares to be reduced. After the repurchase is completed, Restricted sales for 12 months, pre-disclosure for reduction of fifteen trading days in advance, no reduction during the sensitive period, and the daily reduction of holdings shall not exceed 25% of the daily average volume of the 20 trading days before the pre-disclosure date. The number of reductions in the 90 consecutive natural days shall not exceed 1% of the total number of shares of the company, etc., and shall set clear requirements for the reporting period of the reduction of trading transactions, the reduction of price restrictions and the disclosure of reductions.

It should be noted that there are large differences in the implementation conditions, repurchase period, quantity requirements, and follow-up treatment of the repurchased shares in the case of “necessary for the maintenance of company value and shareholders' equity”, and the reduction of registered capital. Employee stock ownership plan or equity incentive, convertible bondConversionThe implementation of the combination of circumstances will increase the complexity of the implementation of the repurchase shares.

According to the accounting standards, the shares repurchased by the company are managed as treasury shares before the cancellation or transfer, and the total cost of the repurchased shares is included in the cost of the treasury shares. When the company transfers the treasury shares, if the actual amount received is higher than the cost of the treasury shares, the difference shall be included in the capital reserve; if the actual amount received is lower than the cost of the treasury shares, the difference shall be offset against the capital reserve and surplus. Accumulated, undistributed profits. Therefore, the repurchase, holding and sale of their own shares by listed companies will not affect the current profits, and the company cannot adjust profits by repurchasing and selling its own shares.

  Q: Before the release of the Repurchase Rules, does the listed company's existing stock repurchase program need to apply the new regulations?

A: Before the implementation of the “Repurchase Rules”, if the repurchase plan disclosed by the listed company has not been completed, the follow-up implementation shall apply the general provisions of the “Repurchase Rules”, implementation procedures and information disclosure requirements. Where the disclosure plan includes “necessities necessary for the maintenance of company value and shareholders' equity”, the listed company shall verify whether the preconditions and relevant procedural requirements of the situation are met, and the follow-up arrangements shall be clarified. Where the disclosure plan includes multiple uses, but the specific circumstances corresponding to the various uses are not clear, the listed company shall specify the quantity or funds of the shares to be repurchased for various purposes within 3 months from the date of the release of the Repurchase Rules. The total amount shall be supplemented in time after the relevant review procedures are implemented.

  Q: Please tell us about the general content of this simultaneous revision of the "Announcement Format".

A: The "Announcement Format" further refines and clarifies the information disclosure requirements on the basis of the "Repurchase Rules", the repurchase proposals, the repurchase plan, the repurchase report, the progress and results of the repurchase implementation, and the repurchased shares. The information disclosure of the progress and results of the process has been detailed. For example, if the proposal or repurchase program includes “requirement for the maintenance of company value and shareholders' equity”, it is necessary to disclose the calculation process of relevant indicators, indicating whether the preconditions are met, and whether the proposed date and the date of the board meeting meet the requirements; If the purchase period expires or the plan has been implemented, it is necessary to verify in the announcement of the repurchase result whether the repurchase implementation process violates the repurchase rules in the Repurchase Rules, and may not repurchase during the sensitive period, “crawl” repurchase terms, restrictions on trading commission period, Certain entities may not reduce their holding requirements; if the repurchased shares have been processed, it is necessary to verify in the results announcement that the share reduction is in compliance with the requirements of non-reduction, reduction of rhythm and quantity, and trading commission time limit.

  Q: The market is very concerned about how to ensure the fairness of the repo process, and to prevent violations of insider trading, market manipulation, and interest transfer. In this regard, what are the considerations for deep communication?

A: Taking into account the status and information advantages of specific entities such as listed companies, directors, and controlling shareholders, the “Repurchase Rules” require listed companies to establish a standardized and effective internal control system. Dong Jiangao and relevant securities service institutions should Diligent and responsible. If a listed company fails to disclose the information on the repurchased shares in compliance with laws and regulations, the Shenzhen Stock Exchange may require the listed company to supplement the disclosure of relevant information, suspend or terminate the repurchase.

The Shenzhen Stock Exchange will strengthen the monitoring of repurchase transactions and the trading of shares of specific entities, strengthen the linkage between transaction monitoring and information disclosure supervision, and find timely regulatory measures after reporting abnormal trading behaviors and report to the China Securities Regulatory Commission on the insider trading. Control the market and other violations of laws and regulations, effectively maintain market order, protect the interests of small and medium investors, and play an active role in the system of repurchasing shares.

  Q: What should the listed company pay attention to during the process of repurchasing shares?

A: The release of the "Repurchase Rules" and "Announcement Format" further clarifies the process specifications and information disclosure requirements for listed companies to implement the repurchase of shares. Listed companies should conscientiously study relevant legal rules, study and improve the corporate governance mechanism related to the repurchase of shares, improve the company's articles of association in a timely manner, improve the internal governance system, conduct repurchase in accordance with laws and regulations; prudently formulate repurchase plans, fully consider their own business conditions, cash Flow, asset-liability ratio, interest-bearing liabilities, etc., to promote the company's sustainable and healthy development. The controlling shareholder and actual controller of a listed company shall support the listed company to repurchase shares in accordance with the law, shall not abuse the rights, use the listed company to buy back shares to implement insider trading, manipulate the market, etc.; the listed company’s director Dong Gao shall be honest and trustworthy in the process of repurchase Diligent and responsible, safeguard the interests of listed companies and the legitimate rights and interests of shareholders and creditors.

The Shenzhen Stock Exchange will actively and steadily promote the implementation of rules, support listed companies to carry out share repurchase in accordance with laws and regulations; do special training, policy consultation, and rule guidance to help listed companies become familiar with the new rules of repurchase as soon as possible; continue to sort out and evaluate supervision. Discover new situations, new problems, improve relevant business rules, and optimize related business processes.

  Notice on Issuing the Detailed Rules for the Implementation of the Repurchase Shares of Listed Companies of Shenzhen Stock Exchange

Shen Zheng Shang [2019] No. 22

Market participants:

In order to further standardize the behavior of listed companies in repurchasing shares and earnestly safeguard the legitimate rights and interests of investors, the Shenzhen Stock Exchange (hereinafter referred to as the Stock Exchange) has decided to support the decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China. "Opinions on the Repurchase of Shares by Listed Companies" "Notice on Seriously Studying and Implementing the Decision of the Standing Committee of the National People's Congress on Amending the Company Law of the People's Republic of China", drafted the "Detailed Rules for the Repurchase of Shares of Listed Companies of Shenzhen Stock Exchange" (hereinafter referred to as the "Repurchase Rules"), it is now released.

In order to ensure the smooth implementation of the Repurchase Rules, the following arrangements are made:

1. Before the implementation of the “Repurchase Rules”, if the repurchase plan disclosed by the listed company has not been completed, the follow-up implementation shall apply the general provisions, implementation procedures and information disclosure requirements of the “Repurchase Rules” on the repurchase of shares.

2. Before the implementation of the "Repurchase Rules", if the repurchase plan disclosed by the listed company contains multiple uses but does not specify the specific circumstances of each use, it shall be in accordance with the "Return" within 3 months from the date of the release of the Repurchase Rules. The Purchase Rules stipulates the maximum number of shares to be repurchased for various purposes or the upper and lower limits of the total amount of funds, and the upper limit shall not exceed twice the lower limit, and shall be disclosed in a timely manner after performing relevant review procedures.

3. The “Repurchase Rules” shall be implemented as of the date of promulgation, and the “Guidelines for the Stock Exchange of Listed Companies of Shenzhen Stock Exchange to Repurchase Shares by Central Auction” issued on October 11, 2008 (Shenzhen Shang [2008] No. 148) ) At the same time abolished.

Hereby notice

Attachment:

1,Shenzhen Stock Exchange listed company repurchase shares implementation rules

2,Drafting Instructions for the Implementation Rules for the Repurchase of Shares of Listed Companies of Shenzhen Stock Exchange

Shenzhen Stock Exchange

January 11, 2019

  Detailed interpretation>>

  The repurchase rules officially landed! Four major points of view, to prevent "flicker repurchase"! More than 300 companies have repurchased

  Heavy! The repurchase rules will be officially resold. The repurchase plan needs to be clearly defined. Four new reduction measures will be added. The repurchase purpose must be clearly determined within 3 months.

  Overweight! Share repurchase rules, repurchase of shares for sale, reduction during repurchase, and flicker repurchase

  Buy back a new chart to understand! Repurchase scale, use, reduction of restrictions, etc. have clear "improper arbitrage" is blocked

(Article source: Shanghai and Shenzhen stock exchanges)

                (Editor: DF075)

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