Shanghai Stock Exchange Revises Guidelines for Share Repurchases and Dividends
On December 15, the Shanghai Stock Exchange made significant revisions to the “Guidelines for Share Repurchases”, “Guidelines for Standardized Operations”, and supporting business guidelines, aimed at improving the systems of share repurchases and cash dividends. These revisions are a part of the effort to implement the adjustment arrangements for the relevant rules of the China Securities Regulatory Commission.
One of the key changes is the reduction in the threshold for share repurchases, including relaxing the conditions for “protective repurchases” and canceling the prohibition of repurchase window periods. The purpose of these revisions is to encourage more listed companies to return investors with real money through share buybacks and cash dividends, in order to stabilize investor expectations and promote the healthy development of the capital market.
The Shanghai Stock Exchange is striving to guide listed companies to actively and reasonably distribute dividends, as this plays a positive role in activating the capital market and boosting investor confidence. The “Guidelines for Standardized Operations” aims to strengthen the transparency of information disclosure and encourage companies that do not pay dividends or pay small dividends to increase dividends, while also urging listed companies to reasonably determine their dividend plans.
In addition to the revisions related to dividends, the “Guidelines for Repurchasing Shares” has also undergone changes to lower the threshold for share repurchases of listed companies. Conditions for “protective repurchase” have been relaxed, and the ban on repurchase window periods has been cancelled, among other changes.
The Shanghai Stock Exchange has continuously improved related rules and focused on guiding listed companies to implement cash dividends continuously and stably. As a result, the total amount of cash dividends distributed by Shanghai-listed companies has increased each year, nearly doubling in the past 5 years. The exchange also reports that the frequency of dividends paid by Shanghai-listed companies is increasing, with more companies distributing substantial dividends to their shareholders.
Furthermore, companies listed on the Shanghai Stock Exchange have shown enthusiasm for repurchases, with an increasing number of companies launching buyback plans, underscoring the important role that repurchases play in maintaining the smooth operation and healthy development of the market.
In conclusion, the Shanghai Stock Exchange’s revisions to the guidelines for share repurchases and dividends aim to create a more investor-friendly environment and encourage listed companies to return value to their shareholders through both cash dividends and share buybacks.
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