Core Viewpoint - The China Securities Regulatory Commission (CSRC) emphasizes the need for listed companies to enhance their awareness of returning value to investors through cash dividends and share buybacks, indicating a shift towards optimizing the use of repurchased shares [1] Group 1: Current State of Share Buybacks - The scale of share buybacks in the A-share market has been increasing, with 431 buyback plans announced by August 6 this year, of which 79 plans (18.33%) were for cancellation to reduce registered capital, while 298 plans (69.14%) were for equity incentives or employee stock ownership plans [1] Group 2: Recommendations for Policy Improvement - It is recommended to clarify that only share buybacks for cancellation should be considered equivalent to cash dividends, as per the 2024 regulations, to prevent misuse of funds for equity incentives that do not benefit investors directly [2] - Strengthening regulatory policies and information disclosure requirements is essential, particularly for buybacks intended for equity incentives, to ensure transparency and prevent potential dilution of earnings per share [3] Group 3: Governance and Shareholder Rights - Incorporating buyback cancellation metrics into corporate governance evaluation systems is suggested, with indicators such as the proportion of shares repurchased for cancellation and the impact on earnings per share [3] - Enhancing the voting rights of minority shareholders is crucial, especially regarding significant equity incentive plans, to ensure alignment with the interests of the majority of small shareholders [4] Group 4: Market Constraints and Supervision - Encouraging market forces, such as analysts and media, to scrutinize the actual use of repurchased shares can create pressure for companies to make prudent decisions regarding the allocation of buyback funds [4] - The ultimate use of repurchased shares serves as a test of a company's commitment to shareholder returns and capital allocation wisdom, with a preference for cancellation over equity incentives reflecting respect for investors [4]