The state is intensifying the rollout of a suite of incremental policies, with a key focus on invigorating the capital market as one of the five specific content areas. Due to the release of policy support signals and the strengthening of investor confidence, the A-share market has recently experienced a rapid rise, demonstrating investors' positive and optimistic sentiment towards China's future economic growth prospects. At the same time, it is understandable that some shareholders of listed companies are reducing their holdings to lock in profits. However, when the state is doing its utmost to implement policy measures to maintain a positive economic growth trend, if a large number of actual controllers and persons acting in concert, controlling shareholders, and directors and senior executives engage in high-position cashing operations, involving huge amounts, often tens or even hundreds of millions of yuan, such large-scale reduction activities not only imply that the listed companies themselves are worried about their future profitability or other aspects, but also significantly reduce the stockholding confidence of market investors. This, in turn, amplifies the extent to which the reduction behavior shows that China's economic growth may not meet expectations, becoming a "leakage point" that harms the national economic and financial security operation through "smearing" the Chinese stock market.

In fact, this round of large-scale "reduction tide" has been going on for several days. According to incomplete statistics, during the sharp rise in the secondary market this year, from September 25 to October 7, more than 80 companies disclosed reduction progress or reduction plan announcements; on October 7, nearly 10 listed companies disclosed reduction plan announcements; on October 8, 57 listed companies disclosed reduction plan announcements, among which 23 companies' shareholders planned to reduce the market value of more than 100 million yuan, 6 planned to reduce the market value of more than 500 million yuan, 2 planned to reduce the market value of nearly 1 billion yuan, 6 companies were subject to "clearance-style" reduction by shareholders, and 5 companies were subject to "clearance-style" reduction by actual controllers. As of October 9, since September 25, nearly 200 listed companies have issued reduction announcements, with most companies stating that it is an individual behavior of shareholders, and the company is only cooperating to issue the reduction plan announcement.

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At present, with the implementation of incremental policies to invigorate the capital market, large-scale reduction behavior has become a focus of market attention. In the stock bars of many listed companies that have issued reduction announcements, a large number of stock investors are complaining: "Do you need a face to reduce?" "It's disgusting to run just after the rise" "The eating appearance is ugly" "It is suggested to set up a reduction board and put all on the blacklist" "It is immoral to mow leeks". Some experts strongly condemn the agreement reduction, saying that the agreement reduction, which is convenient to exercise and has a huge amount, is a deformed lethal weapon after being supervised by the China Securities Regulatory Commission. The top priority must be to stop this reduction trend.

On October 10, the Beijing Stock Exchange resolutely clarified its attitude: to strictly crack down on and punish illegal reduction, and at the same time announced several decisions on self-discipline supervision measures and disciplinary decisions, taking punitive measures against three investors.

The Third Plenary Session of the 20th Central Committee of the Communist Party of China clearly pointed out the need to improve the behavioral norms and constraints of major shareholders and actual controllers, and to establish a long-term mechanism to enhance the inherent stability of the capital market. In response to the illegal reduction issues and serious adverse consequences in the stock market since this year, on May 24, the China Securities Regulatory Commission issued the "Interim Measures for the Management of Share Reduction by Shareholders of Listed Companies" and related supporting rules, requiring the strengthening of穿透式 supervision of various "detour reduction" behaviors according to the principle of substance over form, and effectively regulating the reduction behavior of major shareholders, especially controlling shareholders and actual controllers. In order to better transform the "passive" prevention of illegal reduction risks into "active" legal and compliant reduction, and to consolidate the foundation of the stock structure that supports the long-term stable development of China's securities market, it is obviously an optional main direction to further promote the legalization and internationalization of China's securities market by establishing a securities market share reduction platform.

It should be pointed out that the listed companies have issued reduction plan announcements, and the actual reduction actions will only be implemented after 15 trading days from the announcement date. During this period, securities regulatory and other relevant institutions should take a series of specific work to prevent the serious adverse consequences that large-scale reduction behavior may lead to. For securities regulatory institutions, it is necessary to strengthen the supervision of information disclosure, strengthen the review of listed companies' reduction plan announcements, and ensure the authenticity, accuracy, and completeness of the announcement content; require listed companies to clearly state the reasons, quantity, time, and other key information of the reduction in the reduction plan announcement, and strengthen subsequent tracking and supervision; strengthen the monitoring of shareholder reduction behavior, use advanced technical means, such as big data analysis and artificial intelligence, to carry out real-time monitoring and early warning of the reduction behavior of listed company shareholders, focus on monitoring shareholders with abnormal reduction behavior, and take regulatory measures in a timely manner; intervene and communicate in advance, after the issuance of the reduction plan announcement, promptly communicate with listed companies and their shareholders to understand their intentions and plans for reduction, guide them to reasonably arrange the pace and method of reduction, and intervene and guide in advance for reduction behaviors that may cause market panic or adverse effects; according to market conditions and regulatory needs, continuously improve the reduction rules and systems, improve the transparency and standardization of reduction behavior, severely crack down on illegal reduction behaviors, and form an effective market restraint mechanism. For the judicial system, it is necessary to severely crack down on insider trading and market manipulation behaviors, closely monitor market dynamics during the period of listed company reduction plan announcements, legally crack down on possible insider trading and market manipulation behaviors, file and investigate suspected illegal and criminal reduction behaviors, and pursue the criminal responsibility of relevant personnel; establish a close cooperation mechanism with securities regulatory institutions to jointly combat illegal reduction behaviors, share information and resources, and improve regulatory efficiency and law enforcement; during the period of reduction plan announcements, strengthen market monitoring and early warning, timely discover and deal with abnormal situations that may cause market fluctuations, severely crack down on malicious reduction, rumor spreading, and other behaviors, and maintain market order and stability.

Faced with the current reduction phenomenon in the capital market, we must maintain a clear understanding, understand the reasonable and legal profit locking needs of shareholders, and be vigilant about the market fluctuations and confidence impact that large-scale reduction may bring. The incremental policies introduced by the state aim to consolidate the foundation of economic growth and boost market confidence, which is an unshakable and firm direction. We believe that by continuously improving the regulatory mechanism and guiding listed companies to carry out capital operations in a reasonable and orderly manner, it is certain to effectively balance the interests of shareholders and market stability, unswervingly promote the incremental reform of the capital market, and ensure the safe and smooth progress of the ship of national economic and financial security.