China's securities regulator announced on Tuesday that it would start a new round of experiments on split share structure to tackle problems in its sluggish stock market.
"The reform in the first group of four firms is going on smoothly and has begun to work," said China Securities Regulatory Commission (CSRC) in a circular issued on Tuesday.
Basic conditions are mature for further pilot work, though the reform in the four firms have not finished yet, said the circular.
Split share structure refers to the existence of a large volume of non-tradable state-owned and legal personal shares. Due to that, only about one-third of the shares in domestically listed firms float on the markets. The structure puts public investors in a worse position than the actual controllers in making corporate policies and disposing of the firms' profits and assets.
The Chinese government has showed firm determination to deal with the problem, which has baffled the country's stock market for years. The CSRC initiated the experiment on April 29 to end the split share structure and explore ways out for China's sluggish stock market. The reform started in a select four firms on May 9.
In a bid to accumulate more experiences for the reform on split share structure, CSRC has decided to start the new round of experiments.
The securities regulator, however, did not mention the exact time for the reform and what firms would be selected.
(Xinhua News Agency June 1, 2005)
