Securities Regulatory Commission: Make clear requirements for market value management, cash dividends, share repurchases, etc., to push listed companies to enhance investment value and enhance investors' awareness of return

Zhitong Finance App learned that on December 5, the China Securities Regulatory Commission sought public comments on the “Regulations on the Supervision and Administration of Listed Companies (Public Consultation Draft)”. Among them, it is mentioned that investor protection will be strengthened. Clear requirements are made for market value management, cash dividends, share repurchases, etc., to promote listed companies to enhance investment value and enhance investors' awareness of return. Clarify investor protection arrangements during active delisting to prevent listed companies from evading delisting and using bankruptcy and restructuring to harm investors' interests.

The original text is as follows:

China Securities Regulatory Commission seeks public comments on the “Regulations on the Supervision and Administration of Listed Companies (Public Consultation Draft)”

In order to thoroughly implement the spirit of the 20th National Congress and the Second, Third, and Fourth Plenums of the 20th CPC Central Committee, implement the deployment requirements of the Central Financial Work Conference and “Certain Opinions of the State Council on Strengthening Supervision and Risk Prevention and Promoting High-Quality Development of the Capital Market”, further improve the regulatory system for listed companies, and promote the improvement of the quality of listed companies, the China Securities Regulatory Commission has researched and drafted the “Regulations on the Supervision and Administration of Listed Companies (Public Consultation Draft)” (hereinafter referred to as the “Regulations”) based on regulatory practices and in accordance with the “Company Law”, “Securities Law” and other legal provisions.

The drafting of the Regulations is guided by Xi Jinping's ideology of socialism with Chinese characteristics in the new era, adhering to the political and popular nature of supervision, adhering to the main lines of risk prevention, strengthening supervision, and promoting high-quality development. The main content is to promote the improvement of the quality of listed companies and consolidate the foundation of regulatory enforcement and investor protection, regulate the behavior of listed companies and related parties in accordance with the law, and strive to consolidate the foundation for high-quality development of the capital market.

The Regulations consist of eight chapters and 74 articles. In addition to the general provisions and supplementary provisions, the main contents include: First, improving the governance requirements of listed companies, standardizing the governance structure and the actions of key minorities such as controlling shareholders, actual controllers, directors, and executives, promoting the effectiveness of governance and consolidating the foundation for the high-quality development of listed companies. The second is to further strengthen the supervision of information disclosure. In particular, in response to “financial fraud” in the disclosure of information by listed companies, we will focus on cracking down and preventing it in multiple dimensions by improving the internal supervision and control, accountability and recovery mechanisms of listed companies, and prohibiting third parties from cooperating with fraud. The third is to regulate mergers, acquisitions and restructuring. Refine and improve regulations on acquisitions of listed companies, major asset restructuring, etc., further clarify the responsibilities and independence requirements of financial advisors, and support industrial integration and upgrading and enterprise transformation. Fourth, strengthen investor protection. Clear requirements are made for market value management, cash dividends, share repurchases, etc., to promote listed companies to enhance investment value and enhance investors' awareness of return. Clarify investor protection arrangements during active delisting to prevent listed companies from evading delisting and using bankruptcy and restructuring to harm investors' interests. Fifth, strictly crack down on illegal acts, refine the measures that the securities regulatory agency under the State Council can take in carrying out its duties in accordance with the law, and establish special penalties for acts such as seizing guarantees and cooperating with fraud.

Valuable comments from all sectors of society are welcome. In the next step, the China Securities Regulatory Commission will carefully study opinions and suggestions from all sectors of society and further revise and improve relevant provisions in accordance with the basic requirements of scientific legislation, democratic legislation, and legislation according to law.

This article was compiled and published by the Securities Regulatory Commission. Zhitong Finance Editor: Chen Wenfang.