The Effect On Chinese Stock Market Return Rate Of The New Regulation Regarding Selling Shares

After the stock market experienced a plunge in 2015,we found that the stock price crash did not prevent major shareholders and important shareholders from reducing their holdings.On the contrary,the way shareholders reduced their holdings became more diversified.In 2016 and 2017,the regulatory authorities have separately formulated institutional regulations on shareholder reduction,and hope to curb the pressure of reduction.This paper attempts to answer the question of whether the new regulation is a relatively important institutional regulation for several years,whether it can achieve the regulatory effect of the regulatory layer during the implementation period,and explore the market impact of the major shareholder reduction behavior.First of all,this paper expounds the relevant theories of major shareholder reduction,and reviews the new regulation regarding selling shares and its impact on stock returns.Secondly,this paper selects the relevant data of the major shareholder reduction of listed companies from 2016 to 2017.It is found through calculation that after the announcement of shareholders’ reduction of shares,most listed companies have abnormal returns before and after the deadline for reduction.Then,based on the related theories of the shareholder’s motives,such as the motives of major shareholder reduction,this paper empirically analyzes the impact of the new regulations on the stock returns of China.The results show that the annual yield of stocks is significantly positively correlated with the return on equity and the size of the firm,and is significantly negatively correlated with the ratio of book value to market and the shareholding ratio of major shareholders.The above results are in line with relevant theories.The net effect of policy outcomes in this paper is significantly negatively correlated with the stock return rate,indicating that the annual rate of return of stocks with large shareholder reductions under the new rules is significantly affected by the reduction of holdings,reflecting the new rules for reducing holdings.The reduction of major shareholder has a certain degree of deterrent use.Although the overall annual return rate of stocks is affected by a combination of factors,the dual-difference method controls other factors that affect stock returns,so that the effect of the new regulation regarding selling shares can be clearly demonstrated.Finally,on the basis of the above analysis,this paper proposes targeted policy recommendations such as accelerating the registration system and improving the delisting system of listed companies.