Research On The Limitations Of The Reinstatement Of Voting Rights Of Preferred Shares And Overcome The Limitations

Since the China Securities Regulatory Commission issued the "Preferred Stock Pilot Administrative Measures" in 2014,China's preferred stock pilot work has also been carried out for 6 years.However,preference shares originating in the West already have rich practical experience outside the territory.In comparison,the preference share system in China can only be regarded as a baby who has faltered.China 's policies on the issuance,listing,exit,and protection of preference shares The formulation is not perfect.Although academic circles have always disputed whether or not preferred shares have voting rights,the existence or absence of voting rights is not an essential feature of preferred shares,and non-voting shares cannot be equated with preferred shares.Judging from China's practical experience,non-voting preference shares currently occupy an advantageous market position.Compared with bonds and common stocks,preferred shareholders usually have priority in the distribution of dividends and remaining property.At the same time,according to the rights balance rule,such preferred shares also have to lose voting rights,that is,give up the company's operating rights.The shareholders' meeting determines the dividend distribution policy,which is mainly composed of ordinary shareholders,but when the company's operating performance is poor,ordinary shareholders may delay or not distribute dividends,so that the preference shares cannot be paid,and their rights and interests are damaged.The problem of protecting the rights of preferred stocks has been extended,and the system of restoration of voting rights has emerged in this context.Countries in the civil law system generally determine the system for restoring the voting rights of preferred shares in legal form,but the Anglo-American law system grants this right to the articles of association of the company.Outside the territory,when the dividends of preferred stocks cannot be distributed,in addition to the relief of the preferred stock recovery system,a series of supporting policies have been established to play a comprehensive role.China's "Pilot Measures" also provides for the preference stock system and its restoration.However,only Article 11 of the "Pilot Measures" currently provides specific provisions for the restoration of voting rights.Other systems that are compatible are also at the stage of exploration,and there are few ways to protect preferred shares.Although certain conditions are met,the restoration of voting rights of preferred shareholders will be triggered,but voting rights are neither the purpose of preferred shareholders' investment nor the direct shareholder' dividends,but can only indirectly drive ordinary shareholders to make distribution decisions on preferred shares.The relief effect of shareholders will also be greatly reduced.Domestic research on the preference stock system has gradually increased with the deepening of practice,but there is still room for further research on the limitations of the preference stock recovery system and its countermeasures.This article mainly uses comparative research,empirical research,and other methods,combined with extra-territorial legislation and judicial practice,based on the current preference stock data of domestic listed companies.Limitations and countermeasures are systematically studied.