China's securities regulator said that it will make changes to the rules governing the selling of stock by major shareholders and management, in an effort to better protect the rights of small investors and guarantee stable market operation.
Since taking effect in January 2016, the current rules regulating stock sales by major shareholders and management have played a positive role in facilitating the sustainable business operation of listed companies and supporting healthy development of the financial market, but some new situations and problems have emerged, Deng Ge, spokesperson for the China Securities Regulatory Commission (CSRC), said Friday.
In response to questions concerning recent massive stock sales by major shareholders, Deng said at a press conference that the CSRC is aware of these situations and has conducted in-depth research.
Drawing on practical experience, research findings and globally accepted practice, the CSRC will modify the rules and Shanghai and Shenzhen stock exchanges will then unveil detailed regulations, to guide stock sales by major shareholders and management in a standardized and orderly manner, Deng added.
To cope with the market nosedive in January 2016, China's securities regulator unveiled rules to limit major shareholders and management, those who hold more than 5 percent of a company's shares, from offloading their stocks.
They cannot sell more than one percent of the company's shares within any three-month period, and those who want to reduce their holdings have to publicize their plans 15 trading days in advance, according to the rules.