Recently, some major shareholders of listed companies frequently reduce their holdings, which have aroused widely concern in the market. The important shareholders and directors are insiders, and the improvement of the system should be taken to prevent and crack down on the illegal activities such as insider trading, market manipulation and false information disclosure.

The reductionbehavior shall be lawful and compliant.

Wind database shows that by the end of February 15, 232 listed companies published reduction announcement, the total amount to 10.768 billion yuan, and the total amount of last year to 360.9 billion yuan. Last year, 338 shareholders involving 275 listed companies had gone through a round or a round of reduction, and the number of shares had gone to zero.

In addition to the clearance reduction, accurate reduction has also appeared many times. These behaviors seriously disturbed the order of the capital market and undermined the legitimate rights and interests of small and medium investors. The reasons for the reduction behavior of major shareholders are personal capital needs or enterprise development needs.

Tian Lihui, a professor in the institute of financial development at nankai university, believes that the existing problems of the major shareholders and directors are inadequate system, insufficient information disclosure and insider trading. The reduction of illegal activities will shake market confidence and should be severely punished.

As the IPO normalizes, the future A shares market still face significant reduction pressure. The CSRC spokesman Zhang Xiaojun said that the share transfer is one of the basic rights of shareholders of listed companies, but the it must be in accordance with the law. The major shareholders shall be honest and trustworthy in reducing their shares, and shall not abuse their power to infringe upon the legitimate rights and interests of minority shareholders.

Learn from mature market.

It is the common in capital market to regulate the transfer rights of shareholders to guarantee the interests of small and medium investors and market stability.

Tian Lihui said, Hong Kong and other developed securities markets have strict requirements and clear rules on information disclosure, and the core of the rule is openness, fairness and justice.

The SEC set 144 rules to regulate reduction behavior. The Hong Kong mainly provides specific provisions in terms of lock-in and information disclosure for shareholders, directors and senior executives who hold more than 5% of shares.

Improving the relevant regulations.

The insider points out, some important shareholders of listed companies bypassing regulatory requirements in big deals and contract transfer way, realize  clearance  reduction in the short term.

Experts say that the relevant system should be improved to block and regulate the reduction behavior. From the practice of the US and Hong Kong securities market, most of them are regulated and restricted from the restriction of sales period, the reduction of holding mode and the number of reduction. Among them, the lock-up period is not too long, but the related transaction declaration, information disclosure and the reduction of the quantity demand is stricter. Tian Lihui believes that the regulations of reducing shares by the board, supervisors and senior managers is expected to be improved from the legal and more detailed aspects. In jurisprudence aspect, the insiders must uphold the principle of “three principles”. In the details, the insiders need to strengthen prevention.