China’s securities regulator has introduced its most stringent regulations to date, aiming to tighten controls over major shareholders reducing their holdings in the stock market. Announced on Friday, these new rules by the China Securities Regulatory Commission (CSRC) are designed to close loopholes that previously allowed unregulated and indirect reductions in stakes by major shareholders.
The regulations address critical issues in overseeing shareholder reductions in the A-share market. They mandate strict pre-disclosure requirements for major shareholders, set limits on the percentage of shares that can be sold every three months, and impose caps on the sale of shares before a company’s initial public offering. These measures are particularly focused on regulating actions of controlling shareholders and preventing indirect share reduction schemes.
Tian Lihui, dean of the Finance Development Institute at Nankai University, believes these regulations will guide company executives to concentrate on long-term growth and enhance corporate governance. “These regulations are expected to improve the overall quality of firms listed on the stock market,” Tian told China Media Group.
With a focus on fostering a rational and value-based investment approach, the CSRC’s latest regulatory enhancements are poised to build a solid foundation for the sustained stability of the Chinese mainland’s equity markets, Tian added.
Reference(s):
China regulates stock market holding cuts to foster market stability
cgtn.com
