In order to make coordination, the Shanghai Stock Exchange (SSE) has revised the Guidelines No.7 for Self-Regulatory Supervision on Listed Companies of the SSE — Share Repurchase (hereinafter referred to as the "Guidelines for Share Repurchase") and the Guidelines No. 8 for Self-Regulatory Supervision on Listed Companies of the SSE — Management on Share Changes (hereinafter referred to as the "Guidelines for Management on Share Changes"), and solicits opinions from the public.

Share repurchase by listed companies and increase of shareholding by shareholders, directors, supervisors and senior management are important institutional arrangements for reasonably maintaining the investment value of listed companies and enhancing market confidence. They play a positive role in maintaining the stable operation of the capital market and protecting the legitimate rights and interests of investors. In recent years, under the leadership of the CSRC, the SSE has continuously improved relevant rules for share repurchase and increase of shareholding. Share repurchase by listed companies and increase of shareholding have grown steadily in scale. For example, since 2019, more than 500 listed companies on the SSE have implemented share repurchase, and the actual repurchase amount has exceeded RMB 170 billion, as the number and scale of companies implementing repurchase show a steady growth year by year. In the first three quarters of 2022, 234 listed companies on the SSE have implemented share repurchase, and the actual repurchase amount has reached RMB 58.7 billion, of which 14 listed companies have an actual repurchase amount of more than RMB 1 billion. This fully demonstrates the listed companies' confidence and positive expectations for the long-termstable development of the capital market.

In order to further enhance the institutional inclusiveness and convenience of implementation of repurchase and shareholding increase, this revision mainly focuses on the following four aspects.

The first is to optimize the repurchase conditions of listed companies. As one of the conditions necessary for launching repurchase to maintain the company's value and shareholders' rights and interests, the triggering point is adjusted from "cumulative decrease of the closing price of the company's stock within 20 consecutive trading days reaches 30%" to "cumulative decrease of the closing price of the company's stock within 20 consecutive trading days reaches 25%".

The second is to relax the restrictions on the repurchase by newly listed companies. The requirement of "after 1 year of listing" in the conditions for implementing share repurchase will be adjusted to "after 6 months of listing". If a newly listed company intends to implement a repurchase necessary to maintain the value of the company and the rights and interests of shareholders, and the repurchased shares are used to reduce capital, the company will not be subject to the aforementioned listing period.

The third is to shorten the window period that prohibits repurchase and shareholding increase. The window period against repurchasing shares through centralized auction will be shortened from 10 trading days before the announcement of quarterly report, performance forecast and preliminary performance estimate to 5 trading days, and the window period against the auction reduction of repurchased shares will be adjusted accordingly to maintain the consistency of the two. The window period prohibiting directors, supervisors and senior management from buying and selling shares will be shortened from 30 days before the announcement of annual report and semi-annual report and within 10 days before the announcement of quarterly report, performance forecast and preliminary performance estimate to 15 days and 5 days before the disclosure of the relevant announcement, respectively.

The fourth is to reasonably define the period of share issuance. The provision that "no share issuance shall be carried out during the repurchase period" in current rules is further clarified as "the repurchase shall not be carried out after the approval or registration of the refinancing and the initiation of the issuance until the registration of additional shares is completed".

In the next step, under the guidance of the CSRC, the SSE will improve and issue relevant guidelines as soon as possible based on fully evaluating the feedback and suggestions from the public, and maintain the healthy and stable operation of the capital market.