Research On The Influence Of The Regulation Of Reducing Shares On The Price Fluctuation Of The Restricted Shares

When the listed company has the event of lifting the ban on restricted shares,the major shareholders usually immediately reduce their holdings and cash out,which will disrupt the market order and infringe on the rights and interests of small and medium shareholders.Therefore,the regulatory authorities have issued a series of regulations on reducing their holdings.On May 26,2017,China Securities Regulatory Commission(CSRC)issued “Several Regulations on Reducing Shares Held by Shareholders of Listed Companies,Directors,Supervisors and Senior Executives”.The next day,Shanghai Stock Exchange and Shenzhen Stock Exchange issued Implementation Rules respectively.The above three documents together constitute the new version of the reduction regulations,commonly known as the "New Regulations on Reduction of Shares".For the first time,the new rules restrict the shareholders' behavior of reducing shares after the lifting of the ban on restricted shares.Within 90 consecutive trading days,the number of shares to be reduced by means of call auction trading and block trading shall not exceed 1% and 2% of the company's total share capital respectively.At the same time,the number of shares to be reduced shall not exceed the number of shares to be held in the non-public offering within 12 months after the lifting of the ban on restricted shares 50% of the quantity.The introduction of the new regulation of reducing shares limits the shareholders' behavior of reducing shares after the lifting of the ban on restricted shares,and lengthens the period of reducing shares.Theoretically,it can reduce the selling price after the lifting of the ban on restricted shares and relieve the selling pressure.Can the new regulation of reducing shares restrain the fluctuation of the stock price before and after the lifting of the ban on restricted shares,and play a due policy effect? Under this background,this paper studies whether the new rules can effectively restrain the market volatility of the lifting of the ban on restricted shares,in order to explore the policy effect of the new rules in practice.On the basis of summarizing the previous research results,this paper makes a theoretical analysis on the motivation of shareholders' reduction of shares after the lifting of the ban on restricted shares and the formation mechanism of the effect of the lifting of the ban on restricted shares.In the empirical part,we select all companies in Shanghai and Shenzhen stock markets that have experienced the lifting of restricted shares from 2015 to 2019 as research samples,use Python and Excel software for data processing,introduce policy dummy variables for the reduction provisions issued in 2017,and use Stata software for panel data multivariate linear regression.This paper mainly empirically studies(1)whether the new rules of reducing the holdings can restrain the stock price fluctuation before and after the lifting of the ban on restricted shares;(2)the influencing factors of the stock price fluctuation before and after the lifting of the ban on restricted shares;(3)the main board and the small and mediumsized board,the IPO initial restricted shares and the targeted additional restricted shares,as well as the state-owned enterprises and non-state-owned enterprises are grouped to study the new rules of reducing the holdings on the restricted shares of different subjects Before and after the impact of stock price volatility.The empirical results show that: the introduction of the new rules for reducing the holdings aggravates the stock price fluctuation before and after the lifting of the ban;before and after the lifting of the ban,the stock price fluctuation is positively related to the company's lifting scale and equity concentration,and negatively related to the company's circulating market value and valuation level;the new rules for reducing the holdings have more obvious impact on the small and medium-sized board market,IPO initial restricted shares and so on,and have no significant difference between the state-owned enterprises and non-stateowned enterprises.The significance of the research results of this paper lies in: studying the policy effect of the new regulation of reducing holdings,finding that it has not played its due policy effect,indicating that the small and medium-sized investors in our country are not rational,and the large shareholders still have the motivation of reducing holdings and arbitrage,which is helpful for the regulators to change the regulatory thinking,improve the information disclosure system,guide the value investment concept,and help the regulators to keep up with each other In order to guide the capital market to better serve the real economy,we should loosen the restrictions on the reduction of restricted shares.Relevant policy recommendations include: the supervisory layer should keep pace with the times,improve and revise relevant regulations,focus on improving the information disclosure system,and appropriately relax restrictions on refinancing activities.