First, reduce the new regulations.
On the evening of August 27th, 2023, the CSRC made a request to further standardize the behavior of relevant parties to reduce their holdings:
If a listed company breaks the net, or has not paid cash dividends in the last three years, and the accumulated cash dividends are less than 30% of the average annual net profit in the last three years, the controlling shareholder and actual controller shall not reduce their shares in the company through the secondary market. The concerted action of the controlling shareholder and the actual controller shall be carried out in accordance with the above requirements; Where a listed company discloses that it has no controlling shareholder or actual controller, the largest shareholder and its actual controller shall comply with the above requirements.
At the same time, strictly control the total reduction of shareholders of other listed companies and guide them to arrange the reduction rhythm reasonably according to market conditions; Encourage controlling shareholders, actual controllers and other shareholders to promise not to reduce their shares or extend the lock-up period of shares. The CSRC is working hard to revise the "Several Provisions on Shareholder and Director Gao Jian's Reduction of Shares in Listed Companies", improve the effectiveness level of the rules, refine the relevant liability clauses, and intensify the crackdown on illegal reduction.
According to incomplete statistics, about 2,466 A-share companies do not meet this reduction requirement.
Second, the interpretation of the rules
(1) What are breaking and breaking the net?
1, rest
Refers to the stock price falling below the issue price, usually on the day of listing or at the beginning.
Step 2 break the net
Breaking the net is called "the stock price falls below the net asset value", and the stock market price is lower than the net asset value per share.
(B) the significance of the new regulations on reducing holdings
1, protecting the interests of enterprises
Major shareholders have a great influence on enterprises and should be responsible for the operation of enterprises, rather than simply treating enterprises as a tool to collect money. The major shareholder's reduction will affect the choice of other minor shareholders, thus adversely affecting the enterprise. Strictly regulating the reduction system can restrain major shareholders and enterprises, accompany enterprises to tide over difficulties and protect their development.
2. Protect the interests of small and medium investors.
In the past, the interests of small and medium-sized investors were often damaged by the reduction of large shareholders, such as the reduction of small shareholders, cooperation with bookmakers to raise funds, and washing retail investors out of the stock market to avoid their own risks. From the investor's point of view, the new regulations on shareholder reduction link shareholder reduction with the company's operating conditions, shareholder performance and company dividends, standardize shareholder reduction behavior and protect the interests of small and medium-sized investors.
3. Make up the loopholes in the system
In the past, there were many loopholes in the Securities Law, and there were various behaviors of shareholders' illegal reduction of shares, such as violation of pre-disclosure requirements, violation of quantitative proportion restrictions or legal disputes over reduction of shares. The release of the new regulations on shareholding reduction clearly stipulates that shareholders of companies whose shares are broken, profits are broken and dividends fail shall not reduce their holdings, which can standardize shareholders' behavior and make up for loopholes in the system.
Third, the impact of the reduction.
(A) the positive impact of emission reduction
There are generally the following reasons for shareholders to reduce their holdings: cashing out, capital turnover, adjusting the ownership structure, thinking that holding shares is negative or really not optimistic about the company's development prospects. The funds obtained from cash reduction can be used for corporate financing. At the same time, there is a saying in the stock market that "low position is good", that is, major shareholders choose to reduce their holdings when the stock is low. The stock price rises rapidly after the reduction, on the one hand, it can avoid the increased taxes and fees after the stock price rises, on the other hand, it can improve the circulation rate of their shares in the market.
(B) the negative impact of emission reduction
The negative impact of the reduction generally comes from the "clearance" reduction of major shareholders, which will drive a large amount of funds out of the securities market, cause stock market fluctuations and endanger the healthy development of the stock market; In addition, when shareholders reduce their holdings in disorder or violation of regulations, it will also seriously affect the confidence of small and medium shareholders in the company's operation and have a negative impact on the secondary market.
Four. Other restrictions on the reduction.
(A) the reduction ratio limit
1. During his term of office, Dong's annual shareholding reduction shall not exceed 25% of the total number of shares he holds; If Dong leaves office before the expiration of his term of office, he shall not reduce his shares within six months after leaving office, and shall also abide by the stipulation that he shall reduce his shares by no more than 25% every year during the remaining unexpired term of office and within six months after the expiration of his term of office;
2. For the core technical personnel (applicable to the Science and Technology Innovation Board), the pre-listing shares transferred each year shall not exceed 25% of the total number of pre-listing shares held by the company at the time of listing within 4 years from the expiration of the pre-listing shares restriction period, and the reduction ratio can be used cumulatively;
3. For general major shareholders, if they reduce their holdings through centralized bidding, they will continue for 90 natural days at will, not exceeding 1%, and the reduction through centralized bidding is not restricted; In case of reducing holdings in block transactions, it shall be 90 consecutive natural days, not exceeding 2%, and the part of increasing holdings through centralized bidding shall not be restricted.
(2) Pre-disclosure requirements.
1. For Dong, the reduction through centralized bidding needs to be disclosed 15 trading days in advance;
2. There is no disclosure requirement for core technicians;
3. General major shareholders who reduce their holdings through block trading or centralized bidding need to stop trading and fulfill the obligation of good faith for every 5% reduction, and prohibit trading within 3 trading days from the date of this fact to the date of announcement; If the shareholding is reduced by means of agreement transfer, each time the shareholding ratio reaches or exceeds 5%, the obligation to increase the shareholding shall be fulfilled, and no transaction shall be allowed before the announcement.
(3) circumstances in which the reduction is prohibited.
1. The Securities Law stipulates that shareholders, actual controllers, directors, supervisors and senior managers who hold more than 5% of the shares of listed companies, as well as other shareholders who hold shares issued by issuers before the initial public offering or shares issued by listed companies to specific targets, shall not transfer their shares in violation of laws, administrative regulations and the provisions of the State Council securities regulatory authorities on holding period, selling time and selling quantity.
2. Article 141 of the Company Law of People's Republic of China (PRC) stipulates that the shares of the company held by the promoters shall not be transferred within one year from the date of establishment of the company. Shares issued before the public offering of shares by the company shall not be transferred within one year from the date of listing and trading of the company's shares on the stock exchange;
3. The directors, supervisors and senior managers of the company shall report to the company the shares they hold and their changes, and the shares transferred each year during their term of office shall not exceed 25% of the total shares they hold; The shares held by the company shall not be transferred within one year from the date of listing and trading of the company's shares. The above-mentioned personnel shall not transfer their shares in the company within six months after leaving the company.
Verb (abbreviation of verb) conclusion
1. Reduction is a special term in the stock market and futures market, which refers to reducing the number of stocks or futures indicators held. Because the reduction is easy to be abused by shareholders, thus harming the interests of enterprises and small and medium-sized investors, the CSRC further regulates the behavior of shareholder reduction, that is, if the listed company has broken the net or broken the net, or has not paid cash dividends in the last three years, and the accumulated cash dividend amount is less than 30% of the average annual net profit in the last three years, the controlling shareholder and actual controller may not reduce the company's shares through the secondary market.
2. The major shareholder has a great influence on the operation of the enterprise, and should have certain obligations to the operation of the enterprise, instead of simply treating the enterprise as a tool to collect money. The major shareholder's reduction will affect the choice of other minor shareholders, thus adversely affecting the enterprise. Strictly regulating the reduction system can link the reduction of major shareholders with their performance and dividends, encourage major shareholders to accompany enterprises to tide over difficulties and protect their development.
3. The impact of shareholder reduction is mixed. On the one hand, the funds obtained from cash reduction can be used for corporate financing; On the other hand, the "clearance" of major shareholders will drive a large amount of funds out of the securities market, causing stock market fluctuations and endangering the healthy development of the stock market; In addition, disorderly reduction and illegal reduction will seriously affect the expectations of small and medium shareholders on the company's operation and have a negative impact on the secondary market.
4. The new regulations on reducing holdings only further standardize the behavior of reducing holdings. Under normal circumstances, shareholders' reduction is subject to many constraints. For example, key shareholders who hold original shares must strictly abide by the regulations on holding period, selling time, selling quantity, selling method and information disclosure when reducing their holdings; The shares of the company held by the promoters shall not be transferred within one year from the date of establishment of the company.