China's top securities regulator said in Beijing on Monday that
the reform on non-tradable shares introduced recently aims at
eliminating trading rights differences between non-tradable and
tradable shares, not at floating all non-tradable shares on the
stock market.?
"Making all shares tradable doesn't mean selling all shares,"
said Shang Fulin, chairman of China
Securities Regulatory Commission (CSRC).
After the non-tradable shares become tradable, whether they
would come into circulation or not depends not only on the
shareholders, but also on other relevant restrictions, Shang
added.
He clarified the restrictions as follows: first, the entire
strategic layout of state-owned sectors. After the reform on
non-tradable shares is completed, state-owned shares can be cashed
in only upon the approval of the State-owned Assets Supervision and
Administration Commission (SASAC).
Second, the intention of controlling shareholders.
The SASAC recently released guidelines on the Reform on
Non-tradable Shares of State-controlled Companies, which specifies
the allowed proportion of state-owned shares in state-controlled
companies - in line with national economic restructuring plans - as
well as the need to facilitate a sound development of the capitals
market.
Shang said that reforms will be gradual, following the principle
of "pilot companies go first and others gradually follow suit."
Reforms involving the first batch of pilot companies have met with
preliminary success, he added.
He added that the reform on non-tradable shares is not "at any
cost" as some might have suggested. "Instead, it will be carried
out on the judgment of the overall and long-term benefits arising
from the reform," he said.
Transparency in stock market reform promised
Shang promised that more efforts would be adopted to promote
transparency and to stop insider trading.
He said that reform is a very complicated issue. The CSRC will
take all related issues into consideration when formulating reform
rules and regulations, including the reform of companies that have
both A and B shares listed on the mainland stock market and H
shares listed on the Hong Kong bourse.
(Xinhua News Agency June 28, 2005)