On the evening of November 15, the China Securities Regulatory Commission (CSRC) issued the official version of the Regulatory Guidelines for Listed Companies No. 10 - Market Value Management, which came into effect on the date of promulgation. This official version has a number of changes, and the overall "loosening" for listed companies.

The content of "relaxation" involves the content requirements of the valuation improvement plan of the long-term net-breaking company; Narrowing the scope of companies that need to make a special description of the valuation improvement plan at the annual results briefing; Adjust the share repurchase arrangement of listed companies from "required questions" to "optional questions"; If the market performance significantly deviates from the value of the listed company, it is no longer mandatory to issue stock price change announcements in accordance with regulations.

It is worth noting that while the official version of the "14 Articles on Market Value Management" is "relaxed", the individual requirements for listed companies are further "tightened", such as the new requirements for major index constituent companies, requiring them to disclose the formulation of the market value management system after deliberation by the board of directors.

"Deregulation" is mainly reflected in three categories

Category 1: Relax the requirements for the long-term net-breaking company valuation enhancement plan

Relaxation of the content of the valuation enhancement plan: Previously, it was required that the valuation enhancement plan of a long-term net-breaking company must include a target, a time frame and specific measures; Now it's just a matter of planning that is clear, specific, and actionable.

Reduction of the scope of special statements: All long-term net-breaking companies were originally required to make special statements on the implementation of the valuation enhancement plan at the annual results briefing. The official version narrows the scope to "long-term net-breaking companies with price-to-book ratios that are lower than the industry average".

Category 2: Share repurchase arrangements are changed from mandatory to encouraged

Share buybacks have changed from mandatory to optional: The Consultation Paper requires listed companies to specify the plan for share buybacks in their articles of association or other internal documents. The official version was changed to "encourage" listed companies to do so, changing the share buyback arrangement from mandatory to optional.

Adjustment of share repurchase content: The official version also adjusts the content of share repurchase arrangements from "plan arrangement" to "mechanism arrangement" to give the company greater flexibility.

Category 3: Increase the flexibility of stock price change handling

Simplify the handling of stock price changes: When the market performance of a listed company significantly deviates from its actual value, the official version no longer requires the publication of a stock price change announcement, but requires the company to prudently analyze the reasons and take measures to promote the investment value to reasonably reflect the quality of the company.

Removal of mandatory board of directors research measures: In the case of stock price changes that seriously affect investors' judgment, the official version has deleted the provision requiring the chairman of the board to convene the board of directors to study specific measures.

Relaxation of requirements for responding to media reports and market rumors: For media reports and market rumors that may affect investors' decision-making or stock trading prices, the official version only retains the requirement of issuing a clarification announcement, and the official statement and holding a press conference are left to the discretion of the company. New reporting requirements: In these cases, the official version adds a new requirement for the secretary of the board to report to the board of directors in a timely manner.

"Extra weight" focuses on three aspects

Compared with the Consultation Paper, the official version of the "14 Market Value Management Articles" provides more flexibility for listed companies, but also adds several new requirements:

Strengthen the management of major index constituent companies:

The Consultation Paper requires major index constituent companies to formulate a market value management system, clarify the specific division of responsibilities, and provide a special explanation of the implementation of the system at the annual performance briefing. The official version further requires these companies to disclose the formulation of the market value management system after the board of directors deliberates and approves.

Optimisation of Medium and Long-term Dividend Plans:

The new version of the "14 Market Value Management" encourages the board of directors to formulate and disclose medium and long-term dividend plans according to the company's development stage and operating conditions. Specific measures include increasing the frequency of dividends, optimizing the rhythm of dividends, and reasonably increasing the dividend rate to enhance investors' sense of gain. These are not mentioned in the Exposure Draft.

New Investor Awareness Requirements:

In the context of the drafting of the official version of the "14 Articles on Market Value Management", the China Securities Regulatory Commission (CSRC) has added new regulations requiring listed companies to establish an investor-oriented awareness and promote the full reflection of the investment value of listed companies.

Clarify the responsibilities of all parties in the listed company

Listed companies are expressly prohibited from committing violations of laws and regulations in the name of market value management. Listed companies and their controlling shareholders, actual controllers, directors and senior managers need to earnestly raise their awareness of compliance, and shall not engage in various violations of laws and regulations such as market manipulation, insider trading, and illegal information disclosure in market value management, which harm the legitimate rights and interests of small and medium-sized investors. Under the conditions of the controlling shareholder, the controlling shareholder can boost market confidence by increasing its shareholdings and other means.

Requirements for special listed companies

Major index constituent companies: A market value management system should be formulated and publicly disclosed, and the specific division of responsibilities and internal assessment and evaluation should be clarified. At the annual performance briefing, the implementation of the system will be specially explained, and the formulation of the market value management system will be disclosed after deliberation by the board of directors.

Other listed companies can refer to the implementation.

Long-term broken companies: A valuation improvement plan for listed companies should be formulated and disclosed after deliberation by the board of directors. Valuation enhancement plans should be clear, specific, and executable, and avoid using expressions that are likely to cause ambiguity or mislead investors. For long-term net-breaking companies with a price-to-book ratio lower than the average level of the industry, it is required to explain the implementation of the valuation improvement plan at the annual performance briefing.