The China Securities Regulatory Commission issued new regulations to manage the reduction of shareholdings by shareholders, directors, supervisors and senior management of listed companies. On May 27, 2017, the China Securities Regulatory Commission issued “Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Management of Listed Companies”, revising some of the original provisions. The Shanghai Stock Exchange, The Shenzhen Stock Exchange has also issued corresponding detailed rules to improve the holding reduction system, which will be implemented from the date of issuance. The changes in the New Deal mainly include:
1) Expand the scope of application: On the basis of regulating the holding reduction behavior of major shareholders (controlling shareholders or shareholders holding more than 5% of the shares) and directors, supervisors and senior management, the new regulations will impose restrictions on other shareholders reducing their holdings of the company’s pre-IPO shares and listed companies’ non-standard shares. Supervise the public issuance of shares.
2) Limit the proportion of shareholding reduction through collective bidding: major shareholders or specific shareholders shall not reduce their holdings by more than 1% of the total share capital within 90 consecutive natural days; shareholders can reduce their holdings through centralized bidding transactions of shares issued before the initial public offering and non-public issuance of listed companies. The number of shares held within 12 months from the date of lifting of the ban shall not exceed 50% of the number of shares held by the company.
3) Strengthen the disclosure of shareholding reduction through collective bidding: Major shareholders, directors, supervisors and senior management who reduce their shareholdings through centralized bidding transactions shall report their shareholding reduction plan to the exchange 15 trading days before the first sale of shares, and shall report the shareholding reduction plan to the exchange after more than half of the amount is reduced or When the holding reduction period is over half way, the progress of the holding reduction shall be disclosed, and an announcement shall be made within two trading days after the implementation of the holding reduction plan.
4) Improve the rules for transfer by agreement: When major shareholders or specific shareholders reduce their holdings by transfer by agreement, the transfer ratio of a single transferee shall not be less than 5% of the total share capital, and the lower limit of the transfer price shall be subject to the provisions of bulk transactions.
5) Improve the supervision of “bridging shareholding reduction” of large transactions: major shareholders or other shareholders reduce their shareholdings through large transactions. The total number of shares reduced within any consecutive 90 days shall not exceed 2% of the total share capital. The transferee shall not exceed 6% of the total share capital. The transferred shares shall not be transferred within 3 months.
6) New restrictions on reduction of shares held by directors, supervisors and senior executives: When directors, supervisors and senior executives resign before the expiration of their term of office, they shall transfer no more than 25% of the shares held each year during their term of office and within 6 months after the expiration of their term of office; after resignation, Shares may not be transferred within half a year.
7) Improve the share calculation method: Major shareholders stipulate that the shares held by major shareholders and their consistent actors when reducing their holdings through call auctions and block transactions are combined and calculated.
Companies in the textile and apparel industry that have recently been listed or completed non-public offerings will be relatively affected. The introduction of this new regulation will have an impact on the shareholders, directors, supervisors and senior management of all listed companies. Among them, companies that have recently been listed or completed non-public offerings are usually The proportion of restricted shares is higher, and shareholders have stronger expectations of reducing their holdings after the expiration of the ban. After the introduction of new regulations, the liquidity of shareholders’ shares becomes worse, and the progress of future shareholding reductions will be greatly affected.
Currently, there are 23 listed companies in the textile and apparel industry that have completed non-public offerings but have not yet been lifted. The number of companies accounts for 24.47% of the total industry, and the unblocked market value accounts for 5.72% of the total market value of the industry. Among them, Shandong Ruyi, Jiangsu Cathay, Shangying Global and other companies have not yet been lifted. The non-publicly issued shares account for more than 30% of the total share capital. For these 23 companies, the fixed-increase targets shall not reduce their holdings by more than 50% of the number of non-publicly issued shares held within 12 months after the ban is lifted, and the shares that have been released from restricted sales through auction transactions within 90 consecutive days after the ban is lifted shall not be reduced. The number of unblocked and restricted stocks that exceed 1% of the total share capital and can be reduced through block transactions shall not exceed 2% of the total share capital, thus easing the pressure on shareholding reduction.
There are 20 listed companies in the textile and apparel industry that have not yet been fully lifted after their IPOs. The number of companies accounts for 21.28% of the total industry, and the unblocked market value accounts for 10.23% of the total market value of the industry. Among them, the unblocked shares of companies such as Peacebird, Hassen Holdings, and China Submarine Co., Ltd. account for more than 10% of the total share capital. 75%. For these 20 companies, after the introduction of the new regulations, original shareholders must not reduce their holdings by more than 3% of the total share capital through centralized bidding or block transactions within 90 consecutive calendar days, so the pressure on sub-new stocks to reduce their holdings has been alleviated.
In addition, for companies that implement equity incentives and have restricted shares, the impact of this new regulation is that directors, supervisors and senior management personnel who receive equity still need to abide by the restrictions on shareholding reduction under the new regulations after leaving the company. However, the scale of equity incentive restricted shares is relatively large. Small, little impact.
The new regulations on shareholding reduction are conducive to standardizing the market order, and the high-quality white horse leaders will benefit in the long term. In the past, shareholders of listed companies in the market used conceptual hype to push up the stock price to cooperate with the reduction of shareholdings, and used the rules of block transactions to bridge the reduction of shareholdings. Such behavior often occurred, affecting market fairness. The new regulations regulate the holding reduction behavior of shareholders, directors, supervisors and senior management of listed companies, slow down their holding reduction speed, avoid large-scale and concentrated holding reduction behaviors that disrupt the order of the secondary market, and help boost investor confidence. Recently, regulators have continuously introduced new policies to rectify chaos in the capital market. This new regulation on shareholding reduction is a continuation of previous regulatory ideas, indicating that regulators have strengthened restrictions on irregular shareholding reduction behaviors, prompting shareholders of listed companies to focus on corporate governance and operations. It will also help guide investors to turn to value investment and reduce short-term speculation.
The introduction of new regulations will have an impact on the progress or plans of major shareholders, specific shareholders, directors, supervisors and senior executives of all textile and apparel companies. Among them, 23 companies have completed the scheduled increase and have not yet completed the scheduled increase.The ban was lifted and the 20 companies that were not completely lifted from the ban after IPO were greatly affected. For these companies whose original shareholders of private placements and IPOs have not yet lifted their bans, in the short term, the new regulations will limit the quantity and speed of shareholding reductions by shareholders, directors, supervisors and senior executives, change the supply and demand pattern of stocks, reduce the impact of large-scale shareholding reductions on stock prices, and have a negative impact on the recent The stock prices of companies that are under greater pressure to lift the ban, especially sub-IPO stocks, have some support. In addition, from the perspective of potential impact, the new regulations on shareholding reduction will lead to a weakening of the liquidity of non-publicly issued shares, investors will be more cautious about private placement projects, and companies that are planning private placements may be affected.
We believe that regulators will continue to control chaos in the capital market and create a fair and good investment environment. In the medium and long term, listed companies that do not pay attention to endogenous growth and rely on concepts to speculate on stock prices will be subject to many restrictions. Governance standards, endogenous growth, steady and standardized The investment value of white horse leaders and growth stocks that carry out capital operations will be highlighted.
Source: Zhongcai.com
Extended reading: https: //www.china-fire-retardant.com/post/9578.html
Extended reading: https://www.china-fire-retardant.com/post/9396.html
Extended reading: https://www.china-fire-retardant.com/post/9402.html
Extended reading: https://www.china-fire-retardant.com/post/9383.html
Extended reading:https://www.yingjietex.com/product/DE-24-Memory-Fabric.html
Extended reading ：https://www.brandfabric.net/polyester-uv-cut-fabric/
Extended reading: https://www.yingjietex.com/product/1600D-Polyester-OXFORD- Fabric.html
Extended reading: https://www.tpu-ptfe.com/post /7732.html
Extended reading: https://www.alltextile.cn/ product/product-88-860.html
Extended reading: https://www .yingjietex.com/product/jacquard-Oxford-fabric.htm
