The Shanghai and Shenzhen Stock Exchanges have recently issued notices on further regulating the reduction of shares, which have refined the regulatory requirements of the "New Regulations on Share Reduction" previously issued by the China Securities Regulatory Commission and established clearer and clearer execution standards. Experts say that by sealing the loopholes in the rules, the "new rules for reducing holdings" can alleviate the pressure of concentrated selling in the short term, guide the market to restore supply and demand balance, and boost investor confidence; In the medium to long term, it can force listed companies to improve operational efficiency and shareholder awareness, which helps guide value investment. Overall, the "new regulations for reducing holdings" have released a signal of strict regulation, highlighting the clear attitude of regulatory authorities to establish a good market ecology and protect the interests of small and medium-sized investors. Strictly determining the situation of non reduction of holdings. According to the "New Regulations on Reduction of Holdings" issued by the China Securities Regulatory Commission, if a listed company has a situation of breaking through the issuance or net profit, or has not received cash dividends in the past three years, and the cumulative cash dividends are less than 30% of the average annual net profit in the past three years, the controlling shareholder or actual controller shall not reduce their holdings of the company's shares through the secondary market. The Notice further clarifies the standards for breaking and clearing. Breakout refers to the situation where the closing price of a stock on any of the 20 trading days prior to the announcement of the reduction plan is lower than the initial public offering price; Breaking the net asset value refers to the closing price of a stock on any of the 20 trading days prior to the announcement of the reduction plan being lower than the net asset value per share at the end of the most recent fiscal year or financial accounting report. The new regulations require 20 consecutive trading days before the announcement of the reduction of holdings to not break through the stock market and not break through the net value, which can reduce the possibility of short-term stock price manipulation. Chen Li, Chief Economist of Chuancai Securities, said that setting two benchmark points for breaking through the net value standard can better reflect the true situation of the company's stock price. For the determination of non compliant dividend standards, the "Notice" specifies that the accounting years of the last three audited annual reports have been disclosed as the benchmark, and accounting years with negative net profits are not included. The new regulations set restrictions on the condition of no dividends for three years, and the cumulative amount of dividends for three years has not reached the standard of 30% of annual net profit. This not only ensures that investors share in the company's profit returns, but also guides companies to formulate dividend policies based on their own profitability, ensuring the rationality and sustainability of dividends. For a long time, shareholders and related entities of listed companies have made "precise" and "clearance style" reductions, causing a significant net outflow of stock market funds, seriously affecting the confidence of the secondary market. The "New Regulations on Reducing Shareholdings" set three thresholds for breaking the law, breaking the net, and distributing dividends, strictly regulating the reduction of important shareholders of listed companies. According to Wind data, as of September 26th, after excluding the situation of repeatedly hitting multiple indicators, more than 1100 companies in the A-share market have hit breaking and net breaking indicators. This means that the scale of industrial capital reduction by listed companies will significantly decrease in the future, which has a relatively positive impact on improving market funding in the short term and can prevent concentrated selling behavior from impacting the stock prices in the secondary market. "said Li Qiusuo, Chief Domestic Strategy Analyst and Managing Director of CICC Research. Dong Zhongyun, Chief Economist of AVIC Securities, believes that the "new regulations for reducing holdings" impose restrictions on disorderly reduction from all aspects and perspectives. On the one hand, it reflects the stable market expectations and protection of regulatory authorities