RepoThe details of the landing, so that the recent "enthusiasm does not reduce" listed companies repurchase behavior can be followed.
Tonight, the Shanghai Stock Exchange issued the “Implementation Rules for the Repurchase of Listed Companies” (referred to as the “Repurchase Rules”):
On the one hand, 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”.
On the other hand, in the light of possible violations, such as “flicker repurchase”, a dual prevention mechanism combining market constraints and regulatory interventions is established to ultimately promote a long-term, win-win and sustainable market mechanism.
Take a look at the focus of the repurchase rules:
1. To maintain the company's value andshareholderThe equity must be repurchased, and the company's stock closing price must be lower than the latest net assets per share; the company's stock closing price has fallen by 30% for 20 consecutive trading days.
2. The listed company's share repurchase shares shall be listed for one year; after the shares are repurchased, the company shall have the ability to perform debts and continue to operate; the company's shareholding distribution shall in principle meet the listing requirements; the company intends to terminate its stock listing and trading through the repurchase of shares. It shall comply with relevant regulations.
3. Listed companies can use their own funds; issue preferred stocks, funds raised by bonds; super-raised funds obtained from issuing ordinary shares, surplus funds from fund-raising projects, and raised funds that have been legally changed to permanently replenish working capital; Purchase shares.
4. The listed company shall reasonably arrange the repurchase scale and repurchase funds, and specify the upper and lower limits of the number of shares to be repurchased or the total amount of funds in the repurchase plan, and the upper limit shall not exceed 1 times the lower limit.
5. The listed company should determine a reasonable price range for the repurchase of shares. The upper limit of the repurchase price range is higher than 150% of the average price of the company's stock transactions before the board of directors passed the resolution of the repurchase of shares. It should be fully in the repurchase plan. Explain its rationality.
6. The listed company shall specify the specific implementation period of the repurchase in the repurchase plan.
7. The listed company shall, at the same time as the first disclosure of the repurchase of shares, disclose to the directors of Dong Jiangao, the controlling shareholder, the actual controller, the repurchase proponent, and the shareholders holding more than 5% of the shares to inquire about their future reduction plans. Specific circumstances, including but not limited to whether there will be a reduction plan in the next 3 months and the next 6 months, and disclose the relevant shareholders' responses.
8. The shares repurchased by the listed company due to the stable stock price may be released in accordance with the provisions of this chapter.announcementAfter 12 months, the company will reduce its holdings by means of centralized bidding. And carry out pre-reduction of disclosure.
9. Listed companies and related parties must do a good job in the management of inside information before they can disclose the information such as repurchasing shares, and the relevant inside information should not use inside information to engage in securities trading. The insider includes the listed company and its director Dong Gao, the securities service institutions that provide services for the repurchase of shares and participate in the consultation, formulation and demonstration of the repurchased shares, as well as the spouses, parents and children of the above-mentioned insiders.
10. The funds obtained by a listed company using a centralized bidding transaction to reduce the repurchased shares shall be used for the main business and shall not be used for direct or indirect arrangement.New sharesPlacing, subscription, or trading for stocks and derivatives, convertible corporate bonds, etc.
Previously, the "Repurchase Rules" draft was released, which triggered hot market discussions, including 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 offer for repurchase, and the return. In terms of the disclosure of purchases, in the officially released version, these contents were responded to by professionals and regulators.
It is reported that the repurchase rules of the Shenzhen Stock Exchange will also be released.
Concerns 1: The repurchased shares can be sold, is it a disadvantage?
The "Repurchase Rules" allows listed companies to sell the shares that have been repurchased. Some feedbacks and media reports worry that the hidden arbitrage space of the practice will cause the company to buy low and sell high, which will cause problems such as controlling stock prices and profitability of stocks. Purchase shares shall be cancelled and not 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, some insiders said that the company can repurchase the company's value and shareholders' rights. This is an important repurchase situation 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.
Focus 2: Add 4 new restrictions on reduction
On the basis of the preliminary draft for comments, the Repurchase Rules also added four measures to reduce the holdings and impose stricter constraints from multiple dimensions:
First, the requirement is to “make the first thing in mind”. The shares repurchased to protect 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 afterwards. sell;
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 of the rhythm by referring to the new regulations on reduction, and require 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;
The fourth is to require the company to use the funds from the reduction of the holdings for the company's main business.
As a result, there are 9 reduction requirements. The previous draft for comments has five constraints, including the expiration of the holding period of 6 months, the period of sensitive information window, the reduction of the quantity limit, and the reduction of the price. 5 requirements including restrictions and pre-disclosure. According to relevant persons of the Shanghai Stock Exchange, this is mainly to prevent possible violations of laws and regulations such as “market manipulation” and “improper arbitrage”.
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.
Focus 3: Strengthen specificShareholder reductionRequest, take advantage of the opportunity to profit
The officially released "Repurchase Rules" further strengthen the relevant requirements for specific shareholders to reduce their holdings from information disclosure:
First, in order to repurchase the company's value and shareholders' equity, the company may have a greater impact on the stock price when the repurchase is disclosed for the first time. Therefore, the time limit for the reduction of the above specific entity will be moved to the company's first disclosure. When repurchasing;
The second is to further strengthen the disclosure obligations of major shareholders including more than 5% of the shares during the repurchase period, requiring the company to disclose to the directors, the controlling shareholder, the actual controller, and the proposal when the company first discloses the repurchase of shares. People, shareholders holding more than 5% of the stocks ask whether there is a specific situation of the reduction plan, and fully reduce the risk according to the response.
This strengthened the restrictions on reduction and disclosure of special entities during the repurchase period. Previously, the market had the voice that the repurchase system may become a tool to cover the reduction of specific entities and “cutting the leek”, and believed that the share reduction during the repurchase period should be expanded. The scope of the restricted subject should not allow the company to reduce its holdings while repurchasing its shareholders.
According to industry insiders, 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 order to prevent the repurchase from repurchasing as a major shareholder, the company has corresponding regulatory arrangements. 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 should comply with the CSRC and the Shanghai Stock Exchange. Regarding the relevant provisions on shareholding reduction; if the company repurchases shares for the purpose of maintaining the company's value and shareholders' rights, the above-mentioned specific entities may not reduce their shares during the repurchase period.
Focus 4: Prevent “fudge” repurchase and regulate the use of repurchased shares
The Exposure Draft requires 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" will increase the "negative list" of the use of the 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. Subsequently, the 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.
The relevant person in charge of the Shanghai Stock Exchange introduced that the company law revision 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. The content of the repurchase program can be changed as required. 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.
Focus 5: Determined the transition period, 3 months to clearly repurchase
In response to 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.
If the company fails to complete the repurchase due to compliance with the new regulations, it may 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 and information disclosure as required. obligation.
Concern 6: The enthusiasm of listed companies for repurchase
The data shows that since 2019, 26 A-share companies have issued share repurchase plans or plan amendments, and most of the revised companies have raised the amount of the plan. In addition, more than 100 listed companies have implemented share repurchases since 2019. The share repurchase of listed companies continued to be enthusiastic.
It is worth noting that the repurchase amount for the whole year of 2018 is nearly 7 times that of 2017. In the four years from 2014 to 2017, the amount of shares repurchased was 9.199 billion yuan, 10.93 billion yuan, 5.03 billion yuan, and 9.869 billion yuan. In 2016, the repurchase amount exceeded 10 billion yuan, and the total repurchase amount in the four years was 35.529 billion yuan, equivalent to 57% of the year of 2018.
Chuan Cai SecuritiesAnalystDeng Lijun said that listed companies are keen to repurchase the main four benefits, one can play a role in stabilizing the stock price. Most of the listed companies that buy back shares are operating in the process of falling stock prices. Since the amount is not huge, it has little impact on the market. But the repurchase can show investors the company's determination and confidence and help stabilize the stock price. Second, if the shares repurchased are cancelled, the asset structure can be optimized. Third, long-term shareholders who return value investment. For high-quality enterprises with better cash flow, the shares repurchased can be improved after cancellation.Circulating shareholderStock value. Large shareholders have realized market value management, and tradable shareholders have enjoyed relevant benefits, which is conducive to encouraging investors to invest in value. Finally, it also promotedConvertible bondMarket. Under the terms of the new Company Law, the repurchased shares can also be used for convertible bonds. In essence, the use of stocks to pay off debts has widened the company's financing channels in disguise, and convertible bonds will be more popular.
Deng Lijun believes that in the short run, companies that meet the requirements of the New Deal and have sufficient cash on the books may proceed.Stock repurchaseIn the medium and long term, companies with good fundamentals and strong cash flow ability are more likely to buy back, but they also need to be alert to hot-selling and flick-backed companies.
The Shanghai Stock Exchange said that it also revised the guidelines for the relevant stock announcements for stock repurchase in accordance with the "Repurchase Rules" to improve the rule-friendliness and facilitate the company's preparation, disclosure of repurchase plans, repurchase reports, repurchase progress and results announcements. At the same time, it 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., and give full play to the positive effect of the new share repurchase system to promote the stable and healthy development of the capital market.