According to the proposals, changing the split-share structure is an important reform for China's capital market. This will be good for improving the pricing system of the market, strengthening market restrictions on listed companies and promoting the reform of the state-owned enterprises.

The split share structure refers to the existence of a large volume of non-tradable state and corporate shares. Currently, only about one-third of the shares in domestically listed companies are floated on the market, which has been blamed as one of the major problems of China's sluggish stock markets. The structure puts public investors at a worse position than the actual controllers of the listed companies

The proposals require that the reform should focus on improvement of the capital market and the long-term development of the listed companies. The reform aims to improve structure of listed companies, optimize capital structure and increase capital returns.

The proposals made a clear requirement that legal rights of investors, especially public investors should be fully protected through standard and effective proceedings.

It is the basic requirement for the reform is to receive general recognition and support, said the proposals.

According to the proposals, large and medium-sized listed companies, especially those partially state-owned, should take this opportunity to improve the modern enterprise system and to increase their capital values.

As major media for reform project designing, recommending institutions should do well their job for the communication and negotiation between tradable share holders and non-tradable share holders. The project should consider interests of all shareholders and the future development of the company, said the proposals.

Furthermore, institutional investors should play a positive role, taking into account of both the overall interests of shareholders and long-term development of the market, said the proposals.

The proposals also require that the reform should be carried out in "a reasonable rhythm." The information disclosure system and market supervision system should be established to keep the order of the reform and other reform measures should be launched to give a promotion to the reform on split share structure with the support of supervision institutions of state-owned properties at all levels.

Market performance on Chinese stock markets has been lackluster during the past three years as investors are hoping to see an end to the split share structure, a residue of China's planned economy.

As a result, China launched the reform early this month by starting from some pilot listed companies.

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