Empirical Study Of The Effect Of The New Rules

With the implementation of non–tradable shares reform,A-Share Stock Markets entered the era of full circulation,and insiders of listed companies reduce their shares more frequently.Due to the Information heterogeneity and capital advantage,insiders can often accurately grasp the timing to reduce their owned shares,through such behaver always causes outside investors become stepping stones for insiders to achieve abnormal return.There are some problems in the framework of transaction supervision in our country,such as the narrow definition of the subject and the way of reducing holdings,and the low requirements for information disclosure.On May 27,2017,China Securities Regulatory Commission(CSRC)issued Announcement No.9[2017] of the China Securities Regulatory Commission-Several Provisions on the Reduction of Shares Held in a Listed Company by the Shareholders,Directors,Supervisors,and Senior Executives of the Listed Company.At the same time Shanghai Stock Exchanges(SSE)and Shenzhen Stock Exchange(SZSE)also issued special rules in order to regulate the insiders to reduce their holdings in order to protect the interests of outside investors.The new rules will regulate reduction of insiders more precisely from the perspectives of reducing restriction,expanding scope of application and strengthening information disclosure.Due to the new rules on reduction of holdings issued in a short time,relevant studies are scarce,few studies only involve directional increase,reduction of block trade and pre-disclosure system.The thesis conducts an empirical analysis on 23,520 insider reduction event samples from March 2016 to December 2018.Through the event study method,the market effect of insider reduction events before and after the new regulation was studied,and multiple linear regression was used to explore the influencing factors of this effect.According the research of this thesis,there are several conclusions followed.Firstly under the regulation of the new rules,the beta coefficient of the samples decreased significantly,which indicated that the The New Rule allows the market to gradually treat insider's reduction events rationally and reduce the risk of reducing stock holdings relative to the market.Secondly,the market effect of insider reductions has a significant negative correlation with the size of reduction,price level and insider holding ratio,while it has a significant positive correlation with the management of the reduction of non-Centralized bidding and thereduction of the unlock of nontradable shares,indicating that The New Rule has effectively reduced the negative effect of insider reduction events.Finally,based on the theoretical analysis and empirical research results,this paper provides a reference for the improvement of policy formulation,supervision,investor decision-making and market value management of enterprises with reduction plans,and provides a reference point for the more complete system construction.