China steps up monitoring on major shareholders’ selling activities

SHANGHAI: China’s two stock exchanges said late on Wednesday that they have stepped up monitoring share selling activities by listed companies’ major shareholders.

Separately, the China Securities Regulatory Commission (CSRC) also reiterated that the transition toward a US-style registration system for initial public offerings would be a gradual process and will not lead to a surge in IPOs.

The statements, published via CSRC’s official microblog, came after the Shanghai benchmark index .SSEC plunged 2.4 percent on Wednesday to the lowest level in four and a half months, breaching the 3,000-point level seen as a key technical support by many investors.

The Shanghai and Shenzhen stock exchanges said in separate statements that they are closely monitoring share sales by major shareholders to ensure that recent restrictions on such transactions are not breached.

The Shanghai Stock Exchange said that it has taken special supervision measures on sales of shares acquired through block trades, and will take action against any activities that impact normal market order.

CSRC issued rules on Jan 7 to further restrict share sales by listed companies’ major shareholders as a sales ban expired, seeking to arrest the market’s free-fall.

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