China allows listed companies to buy back stocks

China's securities regulator has published regulations on listed companies' buy-back of public shares, which became effective as of June 16.

According to the regulations, which is available on the official website of the China Securities Regulatory Commission, new shares should not be issued in the period of buy-back.

Under the regulations, the listed companies should submit their buy-back records to the commission and should be obliged to make public their important information.

The buy-back refers to the behavior that a listed firm buy back some of its public shares and have them written off according to law in a bid to reduce the size of its registered capital, according to the regulations, which contains six chapters and 37 articles.

Analysts say this means that the move allowing listed companies to buy back public shares is helpful to activate the country's stagnant stock markets.

Under the rules, the buy-back decision should not be valid only when over two thirds of the shareholders with voting rights agree.

Source: Xinhua