At the same time that the finance and taxation department announced the halving of the securities transaction stamp duty, on the evening of August 27, the CSRC announced a series of "hard core" measures around a reasonable grasp of the financing rhythm, regulate the behavior of share reduction, and reduce the proportion of margin financing, comprehensive policies and concerted efforts, further indicating the firm attitude of "active capital markets and boosting investor confidence".

Experts believe that the package of policy arrangements proposed by the CSRC in the early stage will accelerate the introduction and step up the landing, and more positive measures will be introduced in the follow-up, forming a "serial move" and "combination" that is powerful and active in the market and boosts confidence.

We will improve regulatory arrangements for ipos and refinancing

To achieve the sustainable development of the capital market, we need to fully consider the dynamic and positive balance between the two ends of investment and financing. Without the steady operation of the secondary market, the financing function of the primary market is difficult to play effectively. The CSRC said that it fully considered the current market situation, improved the counter-cyclical adjustment mechanism of the primary and secondary markets, and made six arrangements around a reasonable grasp of the rhythm of IPO and refinancing.

Specifically, the CSRC made it clear that according to the recent market situation, the IPO rhythm should be tightened in stages to promote the dynamic balance at both ends of investment and financing. For large-scale refinancing of listed companies in the financial industry or large-market listed companies in other industries, the pre-communication mechanism is implemented, and the financing necessity and issuance timing are concerned. For the refinancing of listed companies that have broken, broken, sustained losses in operating performance, and a high proportion of financial investment, the financing interval and financing scale should be appropriately limited. Guide listed companies to reasonably determine the scale of refinancing, and strictly implement the requirements for financing intervals. The audit will focus on whether the previous raised funds have been basically used and whether the previous raised funds project has achieved the expected benefits. It is strictly required that the funds raised by listed companies should be invested in the main business and diversified investment should be strictly limited. At the same time, the CSRC said that the refinancing of listed real estate companies is not subject to breaking, breaking net and loss restrictions.

In the view of the industry, the above measures echo the relevant statements made by the relevant person in charge of the CSRC on August 18. At that time, the person in charge said that the CSRC always adheres to the scientific and reasonable maintenance of IPO and refinancing normalization, while fully considering the bearing capacity of the secondary market, strengthening the counter-cyclical adjustment of the primary and secondary markets, and better promoting the coordinated and balanced development of the primary and secondary markets.

A series of measures to regulate share reduction

Recently, the market has paid more attention to the reduction behavior of major shareholders of listed companies. Taking full account of market concerns, the CSRC has made a series of requirements on further regulating the reduction behavior of relevant parties.

The CSRC said that the listed company has broken or broken the net situation, or has not paid cash dividends in the last three years, and the cumulative cash dividend amount is less than 30% of the average annual net profit in the last three years, the controlling shareholder and the actual controller shall not reduce the company's shares through the secondary market. The controlling shareholder and the actual controller shall act in concert according to the above requirements; Where a listed company is disclosed as a non-controlling shareholder or actual controller, the largest shareholder and its actual controller shall comply with the above requirements mutatis mutandis.

At the same time, strictly control the total number of shareholders of other listed companies to reduce their holdings, and guide them to rationally arrange the pace of reducing their holdings according to the market situation; Controlling shareholders, actual controllers and other shareholders are encouraged to undertake not to reduce their shares or extend the share lock-up period.

The CSRC also revealed that it is paying close attention to revising the "Several Regulations on Shareholders and Directors of Listed Companies to Reduce their Holdings", improving the effectiveness level of the rules, refining the relevant responsibility clauses, and increasing the crackdown on illegal reduction of holdings.

China Securities Journal reporter noted that the relevant person in charge of the CSRC has introduced when answering reporters' questions on August 18, "The next step, the CSRC will continue to do a good job in the supervision of reducing holdings." The person in charge said that major shareholders and directors are the "key minority" of listed companies, and have special obligations and special responsibilities in the company's operation and development, governance and operation, and should effectively safeguard the interests of the company and minority shareholders.

We will relax the margin ratio as appropriate

In recent years, margin trading business has been running steadily, and investors' awareness of rational trading and risk prevention and control has been significantly enhanced. In order to promote the function of margin trading business and better meet the reasonable trading needs of investors, with the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange, Shenzhen Stock Exchange and Beijing Stock Exchange have issued a notice to reduce the minimum margin ratio for investors to buy securities by financing from 100% to 80%. This adjustment will be implemented after the market closes on September 8, 2023.

As of August 24, 2023, the balance of margin financing and short selling on the floor was 1,567.8 billion yuan, and the margin ratio maintained a high level, and the overall risk of the business was controllable. The CSRC said that on the basis of the overall controllable leverage risk, the moderate relaxation of margin financing ratio is conducive to promoting the function of margin financing and short selling business and activating the stock of funds.

The regulator stressed that the adjustment applies to both new open positions and stock contracts, and investors do not have to close stock contracts to apply the new margin ratio. Securities companies can comprehensively evaluate the credit investigation and performance of different customers, and reasonably determine the margin ratio of customers.

Liu Xinqi, head of the financial group of Guotai Junan Research Institute and chief analyst of non-bank finance, believes that lowering the margin ratio is conducive to promoting the function of margin financing and short selling, which is more conducive to active capital markets and boosting investor confidence. In particular, the reduction is also applicable to stock financing transactions, which will benefit investors more broadly.

"This policy is one of the measures to implement the package of policy arrangements recently released by the CSRC to invigorate the capital market and boost investor confidence." This shows that the package of policies has entered the stage of centralized implementation, and the subsequent market will see more positive measures." Liu Xinqi said.

Source: China Securities Journal