Research On The Legal Regulation Of Share Repurchase For Stabilization

After the Companies Law was amended in 2018,the share repurchase for stabilization has been formally established.More and more listed companies begin to apply the share repurchase for stabilization to protect the rights and interests of the companies and shareholders.Due to the imperfection of relevant provisions in the Companies Law and the Securities Law,market manipulation and insider trading are not uncommon in practice.This phenomenon makes it difficult for the share repurchase for stabilization to bring its superiority into full play.Based on the problems existing in the implementation of the share repurchase for stabilization in China,this paper analyzes the loopholes in the current legal regulation of share repurchase for stabilization,and puts forward corresponding suggestions according to the existing defects and deficiencies.The paper is divided into four parts.The first part introduces the share repurchase for stabilization,including the particularity,legitimacy and the necessity of legal regulation.The second part analyzes the existing problems of the share repurchase for stabilization in China,mainly in the implementation standards,proposer’s voting right exclusion,directors’ solvency statement,open lending funds,"safe harbor" system,insider trading regulation,share disposal after repurchase and director’s civil liability.The third part is based on the existing problems of legal regulation in our country,analyzing and comparing the extraterritorial experience in terms of applicable conditions,directors’ solvency statement,the limitation of repurchase fund,"safe harbor" system,insider trading regulation and director’s direct liability.The fourth part focuses on the improvement of the share repurchase for stabilization in China,and puts forward improvement suggestions to eight problems mentioned in the second part,in aimed to provide a reference for the normative development of the share repurchase for stabilization.These suggestions include restricting the application of share repurchase by clarifying the situation of share repurchase and putting forward higher requirements for listed companies,setting up exclusion rules of proposer’s voting rights to improve resolution procedures,and perfecting directors’ solvency statement to strengthen the protection of creditors,introduce the test of asset liability ratio and solvency to limit the financial resources of repurchase,build "safe harbor" system to prevent market manipulation,strengthen the identification and supervision of insider trading,expand the use of fund and strengthen the disclosure of information to strengthen the management of share reduction after repurchase,and clarify the direct compensation responsibility of directors to creditors.