China to limit big sales of non-tradable shares

The China Securities Regulatory Commission (CSRC), the country's securities' regulator, announced on Sunday restrictions on large sales of listed-company' shares formerly subject to lockup periods, in a bid to boost investors' sentiments.

Any sale of more than 1% of a listed company's outstanding shares within one month after lockup expiration should be conducted under the "bulk" trading system, said the CSRC in a statement on its website, adding that shares coming out of lockup cannot be sold within 30 days before a listed company releases annual or half year financial reports.

The move aims at easing lingering concerns on the secondary market, CSRC said. It is also expected to help Chinese capital market amid uncertain global economic outlook.

The benchmark Shanghai Composite Index tumbled as much as 45% since the beginning of 2008 partly because investors are scared about an excessive influx of new shares into the market after the expiration of the lockup period, which could bring negative effect on the regular price mechanism.