China Securities Regulatory Commission issued " guidance " on further deepening
the reform of the system of new shares in 2012 April, which stipulates that secondary
offerings is allowed, which means that the old shareholders could sell part of the
shares of the stocks during the stocks’ issuance. Now, I will put forward some
suggestions about specific rules of secondary offerings, which I consult to the
concrete rules summarized from the overseas market and practical experience,
combined with the reality of China's security market and also taking consideration of
the researchers ’ discussion and statement.
The first part is the introduction, which I will discuss the basic theory of secondary
offerings. I will clarify the definition, characteristics and classification of secondary
offerings, which shall be the understructure of the paper. By analyzing the selling
shareholders, distribution methods, pricing mechanisms, locking system, information
disclosure, to resolve the damage of the secondary offerings.
In the second part I will analysis the feasibility of the secondary offerings. The
current legal system is relatively vague provisions on the secondary offerings.
However, there is no significant substantive obstacle, this is feasible that the shares of
holding prior to the public offering sale through the public offerings.
In the third part I will discuss the concrete system design of secondary offerings.
Secondary offerings may lead to the expansion of moral risk of company insiders and
damage to the interests of investors with the intent of purchasing the stocks in
violation of Securities Law " three principles". Secondary offerings should choose the
way that the sh