China regulator may restrict stock sales by major shareholders

China regulator may restrict stock sales by major shareholders

SHANGHAI - China's securities regulator said on Tuesday it is studying rules to regulate share sales by major shareholders and senior executives in listed companies.

The China Securities Regulatory Commission said that it would consider restricting the proportion of shares that major shareholders could sell during a given period of time.

China's stock market plunged 7 per cent on Monday, triggering a market circuit breaker. The markets were down partly on concerns that a six-month ban on share sales by major shareholders would spark a sell-off when it expires on Jan. 8.

China's securities regulator said on Tuesday that the newly-introduced stock market "circuit breaker" that kicked in on Monday helped calm markets and protect investor interests, although the mechanism needs to be further improved.

"The circuit breaker is an entirely new mechanism and there's no experience (with such things) in China. The market needs some time to gradually adapt to the new rules," the China Securities Regulatory Commission said on its official microblog.

China's stock market plunged on Monday, triggering the circuit breaker for the first time. It halted trade for 15 minutes after the CSI300 index fell 5 per cent, then suspended trade for the remainder of the day when the index dropped 7 per cent.

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