China’s Securities Regulator Restricts Big Share Sales as Stocks Nose Dive

China’s stock regulator said Thursday it will curb major shareholders from selling more than 1% of total shares outstanding within three months, after markets closed early when the circuit-breaker mechanism was triggered for a second day this week.

The China Securities Regulatory Commission has ruled that large shareholders — those holding 5% or more of shares in listed companies — won’t be allowed to sell more than 1% of total shares outstanding within the next three months, according to a statement on the regulator’s website.

The agency also ruled that large shareholders must disclose their share reduction plans to the exchanges 15 trading sessions in advance.

The new measures came before the six-month share reduction ban on large shareholders is set to expire Friday. The new rules are aimed at “preventing concentrated share reduction” and “stabilizing market expectations,” the statement said.

CNBC

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.