In order to improve the convenience of repurchase and further improve the repurchase restraint mechanism, the China Securities Regulatory Commission issued the "Rules for Share Repurchase of Listed Companies" at the end of last week. The new regulations make a number of substantive and detailed provisions on share repurchases, encouraging the listing formula to actively repurchase while intensifying the crackdown on "flickering repurchases".
Crack down on "flickering repurchases".
In Chapter 6 "Regulatory Measures and Legal Liability" of the Rules for Share Repurchase of Listed Companies, the China Securities Regulatory Commission (CSRC) has listed regulatory measures for "flickering repurchases". In addition to the warning letter from the CSRC and the disciplinary action of the exchange, if there is a corresponding prohibited act, the CSRC will punish it in accordance with Articles 192 and 197 of the ** Law. 
*: CSRC's "Rules on Share Repurchase of Listed Companies".
Specifically, Article 192 of the "* Law" includes, "In violation of the provisions of Article 55 of this Law, the market is manipulated, and the illegal holdings are ordered to be disposed of in accordance with the law, the illegal gains are confiscated, and a fine of not less than one time but not more than ten times the illegal gains shall be imposed;where there are no unlawful gains or the unlawful gains are less than 1 million RMB, a fine of between 100 and 10 million RMB is to be imposed. ”
Article 197 of the Law includes, "If the information reported or disclosed by the information disclosure obligor contains false records, misleading statements or material omissions, the information disclosure obligor shall be fined 1 million to 10 million yuan, and the directly responsible managers and other responsible personnel shall be fined 500,000 to 5 million yuan." ”
The China Securities Regulatory Commission (CSRC) said that it has recently taken administrative regulatory measures such as ordering corrections to listed companies that "repurchase defaults". Subsequently, regulatory law enforcement will also be strengthened, and relevant entities will use buybacks to engage in insider trading, market manipulation and other illegal acts, once verified, and resolutely crack down.
Buybacks are encouraged in all directions
In addition to cracking down on repurchase defaults, the new regulations also encourage buybacks in an all-round way.
1.Relax the existing conditions for repurchase that are "necessary to maintain the company's value and shareholders' rights", and adjust one of the trigger conditions, "the company's cumulative decline of 30% within 20 consecutive trading days" to "cumulative 20%", and lower the trigger threshold. 2.A new condition for repurchase "necessary to maintain the company's value and shareholders' equity" is added, and "** is lower than the highest *** 50% in the most recent year" as one of the trigger conditions. This means that if the stock price of a listed company is "cut in half" within a year, it can be repurchased to maintain the company's value and shareholders' equity.
3.Abolish the prohibition of the repurchase window period, solve the practical problem that listed companies are subject to the window period and cannot repurchase, reduce the restriction of the repurchase range, and strengthen the repurchase transaction monitoring mechanism.
4.The basic conditions for repurchase of listed companies have been moderately relaxed, from "listed for one year" to "listed for six months", which gives new listed companies that are willing to repurchase more freedom to repurchase in a timely manner.
5.According to the call auction rules, the original restriction on the declaration of repurchase transactions in the first half hour has been adjusted to the prohibition of declaration in the call auction stage, and the daily repurchase period has been added.
6.It stipulates that listed companies shall not carry out share repurchase and share issuance at the same time. As a result, the repurchase can only be "sincere", not just a formality and ill-intentioned.
The number of repurchasers hit a record high
Since October, in the context of irrational market adjustment, China's capital market has set off a wave of repurchases, and hundreds of listed companies have recently issued repurchase plans. The issuance of the "Rules for Share Repurchase of Listed Companies" has further guided listed companies to protect their disks with "real gold" and protect the interests of investors.
From the perspective of the implementation of the repurchase, according to the data of Oriental Wealth Choice, a total of 1,322 companies have implemented share repurchases this year (as of December 17), which has hit a new high in the history of A-share repurchases, of which 622 are concentrated after October, accounting for nearly half;The total amount of repurchases is 83.3 billion yuan, which is at a high level in recent years. 
Chen Guo, chief strategy officer of China Securities Construction Investment, said that the current A-share market is in the stage of grinding the bottom, and from the perspective of historical deduction, the promulgation and implementation of repurchase policies often promote the market to stabilize and strengthen.
The bottom of the market may not be far from the bottom of the buyback tide
Through the review of history, it can also be found that the repurchase wave is one of the forward-looking indicators of the "market bottom". According to the views of research institutions such as Bank of China ** and Guolian**, from the end of 2018 to the end of 2022, there have been three rounds of large buybacks in A-shares. 
The first round: From November to December 2018, listed companies announced a significant increase in the scale of repurchases, amounting to 20 billion yuan, and lasted until January 2019, and the market bottomed out after January 3, 2019. The second round: In May 2022, 133 companies issued repurchase plans, and with the repurchase wave, from May to June 2022, the market ** range exceeded 115%。
The third round: From September to October 2022, it reached the second high point of the repurchase scale of the year, and the market also bottomed out on October 31.
Based on the monthly announcement of the repurchase amount, the centralized repurchase of listed companies all occurs in the stage of market adjustment or the overall valuation downturn, which is not far from the bottom of the stage of the first point or valuation. It is for investors' information only and does not constitute investment advice
Article**: Oriental Wealth Research Center).