Exploration On The System Of Dividends Of Listed Companies In Our Country

Paying dividend is a fundamental institution of the capital market, as well as an important channel for investors to gain return from the market. For various reasons, the Chinese listed companies’ unreasonable stock dividend behaviors have been existing since the foundation of the securities market. For example, the listed companies do not pay dividend or pay less dividend in a long run, investors do not take dividend as an essential part of their rights, big shareholders take advantage of “Capital Majority” principle to control the company and hurt the interests of the smaller shareholders, and over-speculation environment tempts the investors to excessively pursue for capital gain. All these problems could cause over fluctuation of the securities market, thus hurt the stability and safety of the financial markets, and hinder the functionality of the securities market.To tackle the increasingly prominent dividend-paying problems of listed companies, the Chinese regulators have, from 2000, paid greater attention and devoted more resources. A series of policies were carried out to change the situation. After more than 10 years’ effort, some progress has been made but a large gap still exists comparing to the mature markets of the United States etc. Theoretically and practically, may practices, arguments and discussion still exist, in terms of how regulators, listed companies and investors, as the participants of the market, treat dividend, should or should not and in what way and to what degree regulators interfere the dividend-paying behaviors of listed companies, how to encourage listed companies to pay dividend, and how to secure the interests of medium and small sized shareholders,Dividend institution can effectively strengthen the investment functionality and attractiveness of the capital market, so the markets at different stages should, according to the practical situations, arrange or guide the listed companies to pay dividend. Dividend institution can help the development of market if well managed, but if it is treated as the only way to regulate and govern the market, negative influences could appear. By analysis and research, the author draws the following conclusions: Paying dividend is a autonomous decision of the listed companies. On the basis of respecting the autonomy of the listed companies, regulators could, in combination of enforcing other regulations on listed companies’, make dividend-paying an important and fundamental institution of the capital market, and implement a mandatory dividend institution under certain conditions. Meanwhile, by cutting taxes, introducing class action on mandatory dividend institution, improving the matching institutions to safeguard the return of investors, and learning the advanced and effective dividend institutions from overseas markets, an open, transparent, fair, free, stable and ordered capital market will be gradually established.