Recently, the China Securities Regulatory Commission (CSRC) plans to make the following adjustments and optimizations to share repurchases that are necessary to safeguard the company's value and shareholders' rights:
First, the threshold of a stock price falling below its IPO price has been added as one of the circumstances under which market‑stabilization share repurchases may be conducted. The regulations also stipulate that such repurchases are not subject to the six-month post‑listing requirement and remove the restriction barring orders from being placed during the opening and closing call auction phases of the market‑stabilization repurchase process.
Second, listed companies that have been publicly traded for less than 36 months are required, when their share price reaches the threshold triggering a market‑stabilization buyback, to strictly and conscientiously implement the share‑price stabilization measures stipulated in their listing commitments.
Third, listed companies with excess fundraising proceeds are required to promptly execute share buybacks when they meet the criteria for market‑stabilization repurchases.
Fourth, listed companies are required to earmark a specified proportion of funds from their annual cash dividend plans for the share‑repurchase special fund; those with excess‑raised capital must allocate a designated percentage of such proceeds to the same fund and use it exclusively for share repurchases and cancellations; furthermore, any proceeds generated by listed companies from selling shares acquired through market‑stabilization repurchases via centralized bidding must be deposited into the share‑repurchase special fund.