China's top securities regulator said here on Monday that the reform on non-tradable shares introduced recently aims at eliminating trading right difference between non-tradable and tradable shares, not floating all non-tradable shares at the stock market.

"Making all shares tradable doesn't mean selling out all shares," said Shang Fulin, chairman of China Securities Regulatory Commission (CSRC).

After the non-tradable shares become tradable, whether they would come into circulation or not depends not only on the shareholders' strategic choice, but also on relevant restrictions, said Shang.

He clarified the restrictions as follows: firstly, it depends on the entire strategic layout of state-owned sectors. After the reform on non-tradable shares is completed, state-owned shares can be cashed in only upon the approval of the state-owned assets authority.

Secondly, it depends on the intention of controlling shareholders. Even though there are no restrictions in the laws and policies, the controlling shareholders will hold a substantial amount of shares in the long run in order to control the company.

The State-owned Assets Supervision and Administration Commission recently released the Guidelines on the Reform on Non-tradable Shares of State-controlled Companies, which specified the guidelines on the proportion of state-owned shares in state-controlled companies in line with the national economic restructuring and layout, as well as the need to facilitate a sound development of the capital market.

Shang also said that the controlling shareholders should unwind shares gradually according to the Securities Law and relevant regulations, while disclosing relevant information properly at the same time.

He said that the CSRC would gradually carry out the reform on non-tradable shares by following the principle of "pilot companies go first and others gradually follow up." Currently, reform on the first batch of pilot companies has been completed with a preliminary success, he added.

Source: Xinhua