Research On The Legal Regulation Of Treasury Stock

Treasury shares refer to shares held by a listed company that have been legally issued to repurchase and hold as "inventory".Although the concept of treasury shares is not clearly stipulated in China’s laws,the 2018 amendment to the Company Law essentially establishes the relevant legal system.China’s laws on treasury stocks still need to be improved in terms of treasury stock repurchase,disposal and illegal supervision,mainly involving the reasons for obtaining treasury shares,the exercise of rights,and violations of the law There are issues with buybacks,sources of funding,board decision-making procedures and treasury buyback regulation.To this end,this article explores the conceptual function of treasury stocks,the current state of legal regulation,and the legal regulation of substances and procedures.It mainly includes the following four parts:The first part is mainly an analysis of the concept,characteristics,nature and function of treasury stocks.First of all,the concept of treasury stocks is clarified,and on this basis,the characteristics of treasury stocks are discussed,that is,treasury shares should be publicly issued stocks,and the main body should be a listed company with a certain holding period.Secondly,with regard to whether treasury stocks are company assets,the doctrinal views of "affirmation theory" and "negative theory" are sorted out,and the conclusion is drawn that the nature of treasury stocks is determined by "mixed theory",that is,whether the inventory stocks are determined to be assets of the company based on the stage of existence and specific use of the inventory shares.Finally,regarding the function of treasury stocks,this article believes that it mainly involves four aspects: the company’s financial management and capital operation,employee equity incentives,defense against malicious mergers,and adjustment of the company’s organizational form.The second part mainly discusses the legislative changes of China’s treasury stocks,the current situation of legal regulation and its problems.Among them,this thesis divides the historical evolution of the legal regulation of treasury stocks into a period of negation,development and affirmation.It is of great significance to the research of treasury stocks to introduce the development opportunities of treasury stocks in the historical background of different periods.In addition,this thesis discusses the problems existing in the legal regulation of treasury stocks in China from the aspects of substance and procedure.In the substantive regulation,the scope of rights that can be exercised on treasury shares is not clear,the reasons for obtaining them are too narrow,and there is a lack of regulation of illegal operations;in the procedural regulations,there are legislative vacancies in the provisions on the source of funds for treasury stocks in China,the voting ratio of the board of directors is not strict enough,and the regulation of market operations and insider trading is not perfect.Part Ⅲ refines the substantive legal regulation of treasury shares.First of all,after the acquisition of treasury shares,it is recommended to adopt the "rest theory" proposition of the theoretical circles and learn from the UNITED States’ practice of allowing treasury stocks to participate in the allotment of shares;second,on the basis of the provisions on the reasons for the acquisition of treasury shares in China,add other repurchase reasons to adapt to the development of China’s capital market;finally,in determining the effectiveness of illegal acquisition of treasury shares,the protection of creditors should be the mainstay,that is,whether they are bought back in the open market as the standard to define the effectiveness of the act.In addition,we will strengthen the linkage between the Company Law and the Securities Law,and through the play of their respective advantages,the two laws will cooperate with each other to improve the current rules on information disclosure obligations.Part Ⅳ refines the procedural legal regulation of treasury shares.First of all,in order to safeguard the interests of creditors,the solvency test model is introduced to make up for the legislative gap in China’s regulation of the source of funds for treasury stocks;second,in order to prevent the abuse of control,the "double majority decision" is introduced to regulate the voting ratio of the board of directors and strengthen the supervision of the repurchase of treasury shares;finally,drawing on the spirit of US legislation,the "safe harbor" rules are introduced to regulate the manipulation of the market and strengthen the regulation of insider trading behavior to create a fairer and more open market environment.