CHINA: CSRC introduces Stricter Rules on the Selling of Stocks by Major Shareholders

On 27 May, the China Securities Regulatory Commission (CSRC), published stricter rules on the selling of stocks of major shareholders, in response to concerns raised by retail investors about market volatility.

The new policy aims to improve regulation on stock reductions through block trading, selling of non-public offering shares, information disclosure, and equity transfers via agreements.

Under the new rules, a major shareholder holding more than 5 percent of a company’s shares, must restrict sales of their non-public offering shares to 50 percent of their total holdings in a 12-month period after unlocking. Additionally, shares transferred through block trading should not surpass 2 percent of a company’s total shares in 90 days, and the transferees are not permitted to resell these shares within six months.

Major shareholders, supervisors and management are required to report and publish their holding reduction plans 15 trading days in advance of doing so.

Please follow the link at the top of the page for the CSRC announcement.