2 Min Read
BEIJING, May 27 (Reuters) - China's securities markets regulator published rules on Saturday aimed at preventing major shareholders of listed companies from reducing their holdings in an "intensive, massive and disorderly" manner that "disturbed market order and dented investor confidence," according to a statement on its website.
The China Securities Regulatory Commission (CSRC) started controlling share disposals by major shareholders during the stock market crash in 2015.
As China's economy slows, the market is now once again suffering from signs of accelerated sales by major shareholders.
According to the revised rules, major shareholders are barred from transferring shares to a third party via block trades and then using that institution to sell into the market.
The CSRC also will require listed companies to improve information disclosures regarding reductions in shareholdings and said it would severely punish those who wrongly reduced their holdings.
Plans to revise the rules on big share sales were first announced on Friday.
The CSRC also on Friday approved seven IPOs that aim to raise up to a combined 2.3 billion yuan ($336 million) in a move which appeared to cut the pace of new IPO approvals. In recent weeks the CSRC has typically approved a batch of 10 new IPOs each Friday aimed at raising about 6 billion yuan. ($1 = 6.8525 Chinese yuan renminbi) (Reporting by Samuel Shen and Sue-Lin Wong; Editing by Greg Mahlich)