SFC57Order The Applicability Study

After more than20years of development, China’s stock market has made remarkable achievements, but in the process of development, there have been many problems. Which most investors criticized the dividend policy and earnings management of listed companies, these problems harm the interests of investors is not conducive to the optimal allocation of resources, brought certain negative impact on the securities market of the construction of standardized and legalized. To this end SFC2008SFC issued a "on the to modify cash dividends of listed companies of certain provisions of the decision that SFC57orders designed to protect the interests of investors, optimize the allocation of resources to clean up the market environment, the better to play the stock market investment and financing functions. The57Decree profits allocated to cash accumulated in the last three years accounted for the last three years, the average annual distributable profits to increase the proportion of30%, while profit-sharing ratio and refinancing hook, so raise the refinancing threshold in disguise. The promulgation of Decree No.57be some impact on the behavior of listed companies, the following is the research ideas.First, we previously introduced by the SFC on dividends and refinancing threshold policy, and domestic and foreign cash dividends, earnings management literature review and comment. The defined subsequent earnings management, and analysis of the current status quo of China’s listed companies earnings management, including motivation, types and techniques of earnings management. After combing the empirical methods of earnings management, the main research methods, including surplus distribution method, the magnitude of earnings management research methods and ways of earnings management.The focus of this study is to examine the impact of this change to the market earnings management to empirical. In this paper, based on this policy change BD model study found significant earnings management policy after the introduction of the threshold at the threshold at30%of the earnings management. Subsequent article by empirical research has refinancing and the potential refinancing needs earnings management of listed companies, and found that these types of companies prevalence of earnings management. Also found that different types of listed companies is not the same as the policy response. Specifically issuance, placement of shares and convertible bonds of the sample group in the year before the release of earnings management sharpest proactive; listed companies with high growth and low free cash flow, peak earlier; low high competition free cash flow the peak earnings management is most in need of the funds that year. In addition, the study found a positive relationship between earnings management and capital requirements.These studies found that the presence of Decree No.57profit-sharing ratio is too small and can not change the status of the profit-sharing ratio is too low; also requires the funds listed companies often achieve refinancing requirements through earnings management, on the contrary, is not strong on the need for funds has reached dividend requirements easy refinancing of listed companies, which resulted in a mismatch of resources is not conducive to the optimal allocation of resources. This article considers the applicability of Decree No.57is debatable. This paper put forward policy recommendations:First, the cash dividend refinancing decoupling effectively improve cash dividends of listed companies to protect interests of investors; Second, strengthen the supervision of earnings management, the responsibility of the securities market stakeholders play the role of the main oversight.