Research On The Legal Regulations Of Listed Companies' Share Repurchase

Share repurchase refers to the company's act of repurchasing the company's shares in circulation in accordance with certain procedures,and is a basic institutional arrangement in the capital market.Examining the previous legislation,China's "Company Law" emphasizes the maintenance of company capital,highlights the credit guarantee function of capital,and adopts an attitude that prohibits share repurchases in principle.With the continuous development of the market economy,share repurchase,as a common way of capital operation in mature securities markets,has increasingly highlighted its institutional advantages.Because of its positive effects such as defensive acquisitions,replacement of dividends,optimization of the company 's asset structure,motivation of employees,and improvement of the flexibility of the company 's use of funds,share repurchases are gradually favored by the capital market.In the context of the increasingly vigorous repurchase practice,in order to alleviate the current downturn in the stock market,regulate and support the repurchase behavior of listed companies,the National People 's Congress Standing Committee reviewed and approved the amendment of the company law on October 26,2018 Special revisions were made,and in January of the following year,the Shanghai and Shenzhen Stock Exchanges issued the "Implementation Rules for the Share Repurchase of Listed Companies".The new rules on repurchase have completed the latest breakthroughs in the system,which are specifically reflected in: increasing the applicable situation of share repurchase,clarifying the repurchase requirements of the situation "necessary to maintain company value and shareholder rights";simplifying the repurchase review process in specific situations,Standardize the proposed procedures for repurchasing shares;refine the requirements for information disclosure of repurchase shares and plan changes;enumerate the sources of repurchase funds,and treat cash paid for repurchase shares as cash dividends;clarify the reduction requirements and related restrictions on repurchase shares;Strengthen the daily supervision of share repurchase.This enables the company to have more convenient and market-oriented options in maintaining its own value,protecting shareholders' rights,and implementing long-term incentive mechanisms.It is an important milestone in China's share repurchase system.By reviewing the application of the law in the share repurchase of Article 142 of the revised "Company Law",it was found that the problems left over from the old law have been partially resolved,but there are still some problems that have not yet been answered in the new law,which threatens healthy growth.For example: the lack of legal effect of illegal repurchase behavior leads to the expansion of discretion and the standard of judicial trial;it is difficult to determine the boundary between share repurchase and market operation in judicial practice;The board makes the existing laws unable to effectively regulate legal risks;how to weigh the interests between share repurchase and creditors is in a vacuum in existing regulations.To solve and improve the above problems,the author focuses on the three dimensions of legislative level,regulatory level,and judicial level to improve,with a view to better play the system function of share repurchase.At the legislative level,it is recommended that the "Company Law" clearly establish corresponding system norms for treasury stocks.At the regulatory level,it involves the improvement of departmental rules and industry self-regulatory rules: First,it refines the regulatory rules of the departmental rules and strictly restricts the company 's disclosure obligations on the progress of repurchase implementation and fundraising,so as to fill in the regulatory shortcomings of "flip-flop" repurchase In practice,it is necessary to reasonably distinguish the boundaries between market manipulation and legal share repurchases,and based on the clear nature of market manipulation combined with the current legal regulations,to investigate whether the conduct is legal in terms of the purpose of the operation,the frequency of operations,and the consequences of the behavior.Second,the exchange rules should strengthen the protection of creditors 'interests,through the introduction of localized debt solvency testing mechanisms,limiting the proportion of borrowed funds in the repurchase funds,and improving the three ways to adjust the repurchase procedures.At the judicial level,the author suggests that when judging the effectiveness of illegal share repurchases,the judiciary should consider the nature of the effectiveness of the illegal resolution and give priority to the commercial trial concept.In addition,the law should also improve the liability of illegal repurchase subjects in both criminal and civil compensation.