September 6, 2018 / 2:01 AM / 2 months ago

UPDATE 1-China securities regulator issues draft rule revisions on share buybacks

(Adds more details on rules)

SHANGHAI, Sept 6 (Reuters) - China’s securities regulator on Thursday released draft revisions of company rules that it said were aimed at expediting share buybacks by listed companies.

In a statement on its website, the China Securities Regulatory Commission (CSRC) said the proposed rule revision would broaden the circumstances under which companies are able to buy back shares, and would simplify the procedure for these buybacks.

The draft rules were published for public comments at a time when China’s stock market has taken a hammering amid concerns over economic slowdown and the escalating Sino-U.S. trade war. China’s blue-chip CSI300 index has tumbled 18 percent so far this year.

Share buybacks would reduce equity supplies and typically tends to bolster stock prices.

CSRC said that under current rules, companies are allowed to buy back shares under circumstances that are “relatively narrow”, and the procedure is “not simple enough”, which discourages firms from conducting buybacks.

Under the draft rules, a listed company can buy back shares when it feels the move can help maintain its credibility and protect shareholder interests, such as in employee incentive plans, or convertible bond issuance schemes. (Reporting by Andrew Galbraith and Samuel Shen Editing by Shri Navaratnam)

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