The Pilot System Of Preference Shares Is Wide And Strict To Protect Investors.

Previously on conversion to common stock There are many discussions on the issue of preferred stock. From the perspective of the newly issued preferred stock pilot scheme, the regulatory authorities finally respect the demands of small investors and delete the provisions of convertible preferred stock.

At the same time, in order to start safely and balance the interests of the two categories of shareholders of the preferred stock and common stock, the pilot method has been perfected in other aspects, which is both strict and lenient. The theme of investor protection of legitimate rights and interests has been carried out consistently, and the pilot method of preference shares has finally unveiled the mystery.

According to the pilot of preferred stock Management measures Listed companies are not allowed to issue preferred shares that can be converted into common stock, while the listed companies offering public preferred shares are strictly limited to three categories.

In an interview with the Shanghai Securities Journal, the industry experts said that there had been much discussion about the issue of preferred stock that could be converted into common stock. Judging from the newly issued preferred stock pilot method, the regulatory authorities finally respected the demands of small investors and deleted the provisions of convertible preferred stock. At the same time, in order to start safely and balance the interests of the two kinds of shareholders, the pilot method has been perfected in other aspects, which is tempered with leniency, and the theme of investor protection of legitimate rights and interests is always implemented.

Since the comments on the preferred stock pilot management method, small and medium-sized investors have discussed most of the convertible preferred stock, and the views are also quite consistent. That is, convertible preferred stock may become a new size, non diluted common stock interest, resulting in a fall in the price of the two tier market. The data showed that 429 of the feedback collected by the SFC were targeted at convertible preferred stock provisions, of which 427 were put forward by individual investors.

In order to further protect the rights and interests of individual investors and ensure the smooth implementation of preferred stock, the SFC adopted the opinion and deleted the relevant provisions of convertible preferred stock.

Liu Junhai, director of the Institute of commercial law of Renmin University of China, told reporters that to a certain extent, this reflects the opening of legislation by the regulatory authorities and fully respects the legitimate demands of small and medium investors. At the same time, he also believes that in the future, when the market needs, this clause can also be modified in due course.

Wang Jianhui, deputy general manager of the securities research and development department, also believes that since the preferred stock is not a universal financing tool, it is not necessarily suitable for small and medium investors. This provision is also a phased measure. In the future, preferred stock should be designed as a product suitable for bilateral investment and financing.

At the same time, the pilot method has also reflected the protection of investors' legitimate rights and interests in terms such as issuing conditions, applicability of preferred shares, dividend yield of preferred stock and non-public offering investors' access threshold. For example, the pilot method stipulates that the dividend yield of preferred stock in non-public offering shall not be higher than the weighted average return on net assets in the last two fiscal years. The purpose of this provision is to balance the interests of the two types of shareholders, prevent the high dividend yield of the listed company's non-public offering preferred stock and the problem of interest transmission.

It is worth noting that some investors put forward the proposal to abolish the 5 million standard of individual QFII, which has not been adopted by the SFC. This is also based on the protection of small and medium investors, so as to ensure the smooth implementation of the pilot scheme for preferred stock. Liu Junhai believes that the main emphasis of non-public issuance is market discipline. "Qualified" is not the difference between good and bad, mainly from the perspective of whether it has the ability to resist risks, individual investors can also pass. Investment Funds and other financial products indirectly invest in preferred stock.

According to the preferred stock pilot scheme, in addition to the issuance of preferred shares, the 50 index stocks of the Shanghai stock exchange can purchase or absorb other listed companies by issuing the preferred shares as a means of payment, and buy back common stocks for the purpose of reducing the registered capital. The preferred stock can be issued as a means of payment publicly, or the preferred stock that does not exceed the total amount of repurchase reduction will be issued after the implementation of the buyback plan is completed.

Dong Dengxin, director of the financial and Securities Research Institute of Wuhan University of Science and Technology, believes that another important significance of the preference shares is that for enterprises with overcapacity in energy and chemical industries in the "worst hit areas", the preferred stock can be issued as a means of payment to promote the merger and reorganization of enterprises to become bigger and stronger and adjust the industrial structure.

According to the latest research report of GF, from the overseas experience, preference shares as a way of financing have a direct impact on stock prices. Investors are more concerned about the impact of the financing on the future development of the company. Of course, the issuance of preferred shares has a positive effect on the long-term stable operation of the company. Therefore, in view of the overall situation, the issuance of preferred shares is good for blue chips and is conducive to stabilizing their valuation.

Insiders pointed out that preferred stock The launch not only enriches market securities, but also helps to raise the proportion of direct financing, improve the ability of the capital market to serve the real economy, and promote the healthy and stable development of the capital market.