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

January 11, 2019 19:42
source: China Securities Network

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In the first year of the year, there will be a heavy system officially released!

Today, the Shanghai and Shenzhen Stock Exchanges releasedRepoRules. The version of the above exchanges is an example. Compared with the draft for comment, the official version has made some changes.

Previously, the market was more worried. In the case of disk-type repurchase, will the sale of repurchased shares provide space for improper manipulation of stock prices?

From the official version, the rules in this part are further tightened. The new or revised regulations include: the funds obtained from the reduction of the holdings are used for the company's main business, and the holding period before the reduction is extended from 6 months to 12 months, any 90 days. The reduction must not exceed 1%. And the "contradictory" repurchase has further strengthened the letter of the letter.

The key point is the convergence of the old and new rules: for the purpose of repurchase in the stock repurchase, it is necessary to specify the specific repurchase use within 3 months.

  One of the important changes:

  The shares have been repurchased for sale, and the restrictions are stricter

A brief review, the tray-style repo, the treasury stock system, and the repurchase process simplification are considered to be three new breakthroughs in the repurchase system. The details of the exchange have improved many of the above innovations.

In terms of increasing freedom, no repurchase preconditions are set for some repurchase situations. The source of repurchase funds is also enriched, and these have been implemented by companies in practice. Intermediary opinions are no longer required as hard requirements.

As soon as the draft for comment was released, 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. The views of the parties are different.

According to the draft for comment, in order to prevent flicker repurchase, the company has imposed stricter restrictions on the sale of repurchased shares through the secondary market. The rules only allow “protective repurchase” to sell repurchased shares through centralized bidding. .

Repurchase in other circumstances shall be transferred or cancelled in accordance with the disclosed use. Even if it is a tray-type repurchase sale of shares, the following five requirements must be observed.

The holding period expires 6 months;

The sensitive information window period shall not be reduced;

Daily reduction in the number of restrictions;

Reduce the price declaration limit;

Pre-disclosure is reduced by 15 trading days in advance.

The officially released "Repurchase Rules", based on the restrictions on the draft for comment, add or modify four measures to reduce the holdings and impose stricter constraints from multiple dimensions:

First, it is required to do "with words first." If the tray-type repurchase is intended to be used for future concentrated bidding, the company must clarify the disclosure of the repurchase program, otherwise it may not be changed for sale afterwards;

Second, the holding period before the repurchase of shares has been reduced from 6 months to 12 months;

The third is to control the reduction rhythm by referring to the new regulations. Require that the amount of reduction in any consecutive 90 days shall not exceed 1% of the total share capital to reduce the impact on the secondary market;

The fourth is to require the company to use the funds from the reduction of the holdings for the company's main business, and not to use it directly or indirectly.New sharesPlacing, subscription, or trading in stocks and derivatives, convertible corporate bonds, etc.

In addition, it should be pointed out that according to the "Accounting Standards for Business Enterprises", the company can not actually use the sale of repurchased shares to manipulate profits. Previous market concerns may not be necessary. Because the accounting standards stipulate that the share repurchase, sale or cancellation should be treated as a change in equity, the fair value of the equity instrument 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.

According to industry insiders, with the aforementioned institutional arrangements and constraints, it is not easy for the company to manipulate stock prices and arbitrage by selling the repurchased shares.

  Important amendment 2:

  Strengthen the "conflict repurchase" letter

What is a contradiction repo? Is the company repurchasing, the companyshareholder,ExecutiveThe contradictory operation of reducing the holding.

In this regard, the draft for comment has clarified the restrictions on reduction during the repurchase period.

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 Shanghai Stock Exchange on the reduction of shareholdings; secondly, the protection of the repurchase, the above-mentioned specific subject The company's shares may not be reduced during the repurchase period.

The reporter noted that the officially released "Repurchase Rules" further strengthened the specific information disclosure.Shareholder reductionRelated requirements.

In the implementation of the tray-type repurchase, the time limit for the reduction of the above-mentioned specific subject will be moved forward to the time when the company first disclosed the repurchase;

The second is to further strengthen the disclosure obligations of major shareholders including more than 5% of the shares during the repurchase period.

The company is required to disclose to the directors, the controlling shareholder, the actual controller, the proposer, and the shareholders holding more than 5% of the shareholders whether there is a reduction plan, and respond adequately according to the reply. Prompt to reduce risk.

  Important change three:

  Repurchase for cancellation, may not be changed

Can the use of repurchased shares be changed? This is one of the more concentrated issues discussed in the consultation.

Some feedback pointed out that due to the rapid changes in the capital market, the repurchase use disclosed by the company may undergo major changes. It is recommended to explicitly allow the company to change the use of repurchase shares and increase flexibility.

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 include:

First, if the repurchase shares are to be used for cancellation, they shall not be changed to other purposes;

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.

The Shanghai Stock Exchange stated that it 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.

  Important arrangements:

  Stock repurchase needs to be clearly used within 3 months

There is also a key point, the repurchase rules are implemented immediately, how do the old and new rules work together? The corresponding rules were issued in the notice of the issuance of the rules of the Shanghai Stock Exchange:

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 listed companies disclosed more repurchase plans.Kind of use but not specific. 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-making procedures as required. And information disclosure obligations.

  Extended reading:

  More than 300 companies have already shot 40 billion yuan of ammunition

On the afternoon of January 11, the “Detailed Rules for the Repurchase of Listed Companies” (hereinafter referred to as the “Repurchase Rules”) was officially released! After the repurchase, the shares will be retained, the sources of repurchase funds will be expanded, and the repurchase and the shareholders can reduce the shares and other aspects have been refined.

The rules are released, which means that the official operations have begun. Which companies have prepared ammunition in advance? Which stocks deserve special attention?

According to the statistics of Shanghai Stock Exchange, since the disclosure of the “Detailed Rules for the Repurchase of Listed Companies (Draft for Comment)” (hereinafter referred to as the “Draft for Comment”) on November 23, 2018, 103 companies have disclosed the plan for repurchase shares. The maximum number of shares repurchased was 4.944 billion shares, and the maximum amount involved was 16.303 billion yuan.

During this period, 321 listed companies disclosed the implementation of share repurchase, according toannouncementIt is disclosed that the accumulated repurchase of shares of these companies involves an amount of 37.8 billion yuan.

  9 companies plan to buy back more than 1 billion yuan

From the upper limit of the repurchase amount, a total of 18 companies intend to repurchase the amount of not less than 500 million yuan, of whichZhongtian Finance,TCL GroupThe repurchase amount of 9 companies is not less than 1 billion yuan.

  Companies with a repurchase amount of not less than 1 billion yuan

Zhongtian Finance announced that it intends to use its own funds, financial institutions' borrowings and other financing methods to repurchase part of the company's public shares in a centralized bidding transaction. The repurchase shares do not exceed 420 million shares and not less than 210 million shares. The price of the purchased shares does not exceed 7.54 yuan / share, and the total amount of funds for the repurchase shares does not exceed 3.169 billion yuan.

From the lower limit of the repurchase amount, a total of 8 companies have invested at least 500 million yuan to repurchase shares.

Among them, the largest amount involved in the repurchase of shares is TCL Group. The company uses its own funds, self-raised funds and other financing methods to repurchase the company's shares in a centralized bidding transaction. The total amount of repurchase is not less than 1.5 billion yuan (inclusive). Not more than 2 billion yuan (inclusive), the repurchase price does not exceed 3.8 yuan / share (including).

  Nearly 40 billion yuan of ammunition has been shot

After the disclosure of the "Draft for Comment", listed companies that have disclosed the repurchase plan are more active in buying and opening positions in the secondary market.

Since November 23, 321 listed companies have disclosed the implementation of share repurchase. According to the announcement, the cumulative repurchase of these companies involves an amount of 37.8 billion yuan.

  Midea GroupOn January 2, the announcement stated that as of December 28, 2018, the company had a total of 95.105 million shares repurchased, accounting for 1.4275% of the company's total share capital as of November 30, 2018. The highest transaction price was 48.40 yuan/share. The minimum transaction price is 36.49 yuan / share, and the total amount paid is about 4 billion yuan (the specific amount is 3.997 billion yuan, excluding transaction costs). This part of the shares will be written off.

  A company that has repurchased more shares

Some companies quickly entered the implementation phase after disclosing the repurchase plan.

E.g,Wanfeng AoweiOn December 25, 2018, it decided to repurchase shares. As of 1st and 10th, 2019, the company first implemented the repurchase of shares through a repurchase of special securities accounts in a centralized bidding transaction. The number of shares repurchased was 3,874,200 shares, accounting for the company's total share capital. 0.1759%, the highest transaction price is 7.85 yuan / share, the lowest transaction price is 7.7 yuan / share, the total transaction amount is 29,985,300 yuan.

  Company being bought

How to deal with after repurchase:

Can you log out or wait for the price?

Previously, many repurchase programs disclosed by listed companies included multiple uses but did not specify the specific situation. The "Repurchase Rules" require that the company should specify the number of shares or the total amount of funds for specific reverse repurchase for each use within three months.

Among them, the concern is whether the shares repurchased will be cancelled. Among the 103 companies that disclosed the repurchase plan mentioned above, 35 companies have mentioned the possibility of “deregistration” in the announcement of the repurchase of shares. Individual companies even directly determined that “repurchase shares are used for cancellation”.

  Liyuan InformationThe announcement stated that it intends to use its own funds to repurchase shares of some companies in a centralized bidding transaction to cancel and reduce the registered capital. The total amount of repurchase is not less than 29 million yuan, not more than 30 million yuan, and the repurchase price does not exceed 12.09. Yuan/share, the period of repurchase shares is fromShareholders' meetingIt shall not exceed 6 months from the date of consideration of the repurchase of shares.

  Haitang HouseThe announcement stated that the total amount of funds for this repurchase is not less than 666 million yuan, not exceeding 998 million yuan. According to the total amount of repurchase funds of 998 million yuan, the repurchase price ceiling of 12 yuan / share for calculation, it is estimated that the number of repurchased shares is about 81.367 million shares, accounting for about 1.85% of the company's current total share capital.

Some companies have already started the logout operation.

After repurchasing 4 billion yuan of shares, Midea Group quickly completed the cancellation procedures for the relevant repurchase shares. After the cancellation of the repurchase of shares, the company's total share capital will be reduced from 6.663 billion shares (as of December 28, 2018) to 6.568 billion shares.

However, more companies have not specified the specific use of the repurchased shares. They only indicate that the use of the repurchased shares includes, but is not limited to, subsequent use in employee stock ownership plans or equity incentives; Corporate bonds; or necessary to maintain corporate value and shareholders' equity.

It should be noted that although the Repurchase Rules allow listed companies to use the repurchased shares for future sales, almost none of the disclosed repurchase programs intends to resell the repurchased shares in the secondary market. That is, if it cannot be used for employee stock ownership plans, equity incentives, etc., the final plan is to cancel.

(Article source: China Securities Network)

                (Editor: DF134)

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