The stock buyback and share increase re-lending facility represents an important innovative policy to empower high-quality development of the capital market. To better implement the policy and serve Hubei Province, the China Securities Regulatory Commission Hubei Regulatory Bureau (Hubei CSRC Bureau) has rolled out targeted measures and provided proactive services tailored to the actual development of the local capital market, fully encouraging listed companies and their major shareholders within its jurisdiction to scale up share buybacks and share increases. Since the policy took effect, 31 cases of listed companies in Hubei have carried out businesses under the stock buyback and share increase re-lending facility, with an approved loan ceiling of RMB 6.41 billion. Among others, Huakang Clean, Optoelectronics Co., Ltd., LY Information and Huaxin Building Materials have flexibly leveraged this policy tool on multiple occasions.

It is reported that the Hubei CSRC Bureau pursues both regulation and service, smoothes the “last mile” for policy dividends to reach enterprises directly, and strives to deliver tangible outcomes of the buyback and share increase re-lending policy across the jurisdiction.

First, it fully identifies enterprise profiles. The Bureau systematically sorts out the intentions of local listed companies and their major shareholders for share buybacks and share increases, and establishes a tiered and categorized reserve list of prospective enterprises. Meanwhile, through on-site visits, special forums, online briefings and training sessions, it delivers comprehensive policy interpretation, guiding listed companies to rationally apply the policy tool in light of their operating conditions.

Second, it deepens cross-departmental coordination. The Bureau actively engages the PBC Hubei Branch, focuses on key links in business review, strictly checks the accuracy, completeness and compliance of application data, synchronizes review progress in real time, resolves review hurdles promptly, and effectively raises review efficiency.

Third, it strengthens full-process regulatory services. It continues to consolidate the primary responsibilities of listed companies, urges enterprises to strictly comply with regulatory rules governing share buybacks and increases, standardizes the opening, use and management of dedicated securities accounts, upholds the regulatory bottom line that loan funds shall be “earmarked for specified purposes and operated in a closed-loop manner”, and ensures all businesses proceed in a compliant and orderly fashion. A follow-up mechanism is put in place for approved enterprises to dynamically track fund withdrawal and utilization, guaranteeing policy dividends are channeled directly into the real economy.

Going forward, the Hubei CSRC Bureau will further advance the implementation of the stock buyback and share increase re-lending policy, keep expanding coverage, increasing volume, improving quality and boosting efficiency. It will encourage more eligible listed companies to make full and flexible use of the policy tool, continuously enhance the quality of listed firms, and support the high-quality development of Hubei’s capital market.

Source: Shanghai Securities News