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Regulator eases curbs on stock purchases for major holders
By Louise Ho |
February 21, 2012, Tuesday
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Online Edition
Online Edition
CHINA'S securities regulator has eased rules to allow major shareholders of listed companies to increase stock purchases.
Shareholders with a more than 30 percent stake in a listed company are allowed to increase holdings in the company by not more than 2 percent each year, said the new rules announced by the China Securities Regulatory Commission yesterday.
The lock-up period for the newly purchased shares is also shortened from 12 months to six months, according to the new rules.
A spokesman for the securities regulator said many shareholders of listed companies with a 30 percent stake stopped increasing holdings "for fear of triggering a takeover bid."
"Relevant laws do not limit the proportion of holdings to 30 percent," the spokesman said, adding the new rules can help major shareholders consolidate control of the company.
The new rules also stated shareholders with a more than 50 percent stake in a listed company who has increased 1 percent of their holdings are required to have information disclosures the next day; while those who increased 2 percent of holdings have to stop holdings for that day and the next day.
Before, major shareholders with a more than 50 percent stake can continue to increase holdings of their listed companies after information disclosure.
The regulator made the changes because the original disclosure rules could affect share prices, said the spokesman.
According to data by financial information provider Wind, major shareholders of 129 listed companies in Shenzhen and Shanghai have increased holdings of their listed companies this year.
Analysts said the new rules will not have a big influence on the stock market, but as share prices are rising gradually, major shareholders may decrease holdings later on.
The new rules were passed on December 29 last year and will come into effect on March 15.
Shareholders with a more than 30 percent stake in a listed company are allowed to increase holdings in the company by not more than 2 percent each year, said the new rules announced by the China Securities Regulatory Commission yesterday.
The lock-up period for the newly purchased shares is also shortened from 12 months to six months, according to the new rules.
A spokesman for the securities regulator said many shareholders of listed companies with a 30 percent stake stopped increasing holdings "for fear of triggering a takeover bid."
"Relevant laws do not limit the proportion of holdings to 30 percent," the spokesman said, adding the new rules can help major shareholders consolidate control of the company.
The new rules also stated shareholders with a more than 50 percent stake in a listed company who has increased 1 percent of their holdings are required to have information disclosures the next day; while those who increased 2 percent of holdings have to stop holdings for that day and the next day.
Before, major shareholders with a more than 50 percent stake can continue to increase holdings of their listed companies after information disclosure.
The regulator made the changes because the original disclosure rules could affect share prices, said the spokesman.
According to data by financial information provider Wind, major shareholders of 129 listed companies in Shenzhen and Shanghai have increased holdings of their listed companies this year.
Analysts said the new rules will not have a big influence on the stock market, but as share prices are rising gradually, major shareholders may decrease holdings later on.
The new rules were passed on December 29 last year and will come into effect on March 15.
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