Another move to shore up A-share market

Following up on a recent move to shore up the A-share market by limiting new share listings, the China Securities Regulatory Commission (CSRC) has taken another step to limit new share supply. The CSRC published new regulations that said certain investors of locked up shares that want to transact shares exceeding 1 per cent of a public firm’s total volume within 1 month must use the block trade trading method. Block trades are wholesale transactions negotiated privately so their volume does not impact market prices as the trades do not flow through public exchanges. Many of China’s shares are held in the form of non-tradable shares by state-owned entities. As many of these shares are beginning to be unlocked, the CSRC wants to prevent an influx of new share supply from weighing on the A-share market.