Shanghai bourse caps share-holding reduction rate

SHANGHAI, Jan. 10 — The Shanghai bourse issued a circular to cap the share sell-off rate for large shareholders on Saturday, in an effort to subdue the market’s free fall.

The Shanghai Stock Exchange (SSE) forbids major share holders with stakes at 5 percent or above from selling more than 1 percent of a listed company’s share capital through the stock exchange’s centralist bidding system every three months.

The restriction was announced as stocks plummeted 7 percent half an hour into trade on Thursday, triggering a newly introduced circuit breaker. The mechanism in effect on Jan. 1 was triggered twice in the week.

The China Securities Regulatory Commission (CSRC) has tightened control on short-term big share sales since last year by imposing fines on profiteering trading.

It ordered major shareholders must file their plans 15 trading days in advance of sales on Saturday.

Source: peoplecn

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