Non-tradable share reform to end
By Hu Yuanyuan (China Daily)
Updated: 2005-06-28 06:13

The non-tradable shares reform programme will end as soon as possible without the launch of a third pilot round, the securities regulator has announced.

"The two batches of pilot reforms have been completed and achieved preliminary success," Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC), said yesterday at a press conference.

"On the basis of summarizing the trial experiences, we will consummate the rules and try our best to address the division of equity tradability in a short period of time."

This division originates in the initial capital market structure. Only shares held by public investors, representing a third of all shares, are listed and tradable. The non-tradable remainder are held by the State and legal persons.

"But the reform of non-tradable shares is not 'at any cost' as some people claimed," Shang said. "Instead, it will be carried out on the judgment of the overall and long-term benefits arising from the reform."

The reform of the capital market began on May 9 to end the split share structure, one of the major factors blamed for the country's sluggish stock market performances.

Four companies were selected for the first round of the experiment, and 42 more were involved in the second phase launched on June 20.

Shang said the CSRC will examine complex share structures when formulating regulations - such as those companies with both A and B-shares listed on the mainland stock market and H-shares listed in Hong Kong.

"There will be no non-tradable shares when launching new initial public offerings," Shang added.

Close