The Study Of The Secondary Offerings' Legal System

China Securities Regulatory Commission issued "guidance" on further deepening the reform of the system of new shares in 2012 April, which stipulates that secondary offerings is allowed, which means that the old shareholders could sell part of the shares of the stocks during the stocks' issuance. Now, I will put forward some suggestions about specific rules of secondary offerings, which I consult to the concrete rules summarized from the overseas market and practical experience, combined with the reality of China's security market and also taking consideration of the researchers' discussion and statement.The first part is the introduction, which I will discuss the basic theory of secondary offerings. I will clarify the definition, characteristics and classification of secondary offerings, which shall be the understructure of the paper. By analyzing the selling shareholders, distribution methods, pricing mechanisms, locking system, information disclosure, to resolve the damage of the secondary offerings.In the second part ? will analysis the feasibility of the secondary offerings. The current legal system is relatively vague provisions on the secondary offerings. However, there is no significant substantive obstacle, this is feasible that the shares of holding prior to the public offering sale through the public offerings.In the third part ? will discuss the concrete system design of secondary offerings. Secondary offerings may lead to the expansion of moral risk of company insiders and damage to the interests of investors with the intent of purchasing the stocks in violation of Securities Law "three principles". Secondary offerings should choose the way that the shareholders sell the shares directly, or the way of regarding secondary offerings as the over-allotment shares source, for the purpose of enhancing the flexibility of secondary offerings and maintaining the stability of secondary market. After the issuance, the position of the company's controlling shareholders, actual controller shall not be changed; the quantity of the shares which the directors, supervisors and executives sell should be restricted. Voting on secondary offerings should take the "majority voting "procedure, restricting the shareholders' voting rights. If the shareholders who wants to sell their shares participate in the pricing issue, the stock price may be more fair. But the current pricing mechanism has certain irrationality, which should be improved. The fund arising from selling the shares should be locked in a certain period. When the price of the stock falls below issue price, the fund could be forced the repurchase of shares, and any way of transferring the fund is forbidden.In the fourth part I will discusses the disclosure system of information about secondary offerings. To obtain high premium, the issuer has strong motivation of financial fraud and disclosure selectively, leading to the disclosure of false information. Through the analysis of information disclosure system of overseas stock market which is relatively mature, I will present the disclosure system of information of secondary offerings, content to disclose and responsibility undertaken when disclosure. In the disclosure documents, the motivation, the shareholders with the intent of selling shares and the risk of secondary offerings must be fully disclosed.