China's latest move to reform its B-share market will not change its policy of encouraging companies to list in Hong Kong, according to Securities and Futures Commission chairman Andrew Sheng. Mr Sheng said he had spoken to China's securities watchdog, the China Securities Regulatory Commission (CSRC), and confirmed that the mainland would continue to encourage more companies to list in Hong Kong by issuing H shares. On Monday, China suspended the B-share market and announced that domestic residents with legal foreign currency savings could invest in the B-share markets in Shanghai and Shenzhen, previously only open to foreign investors. Domestic investors could only invest in the A-share market in yuan. Chinese companies could issue A or B shares on China's stock markets, or H shares on Hong Kong's market. While some Chinese companies issued both A shares in China and H shares in Hong Kong, there were no cross-listings between the B and H-share markets, Mr Sheng said. 'The B-share reform will not affect the Hong Kong securities market significantly,' he said. Mr Sheng said he supported China's reforms as they would add liquidity to the B-share market. The liquidity of B shares issued by 113 companies had only a combined US$7.7 billion market capitalisation at the end of last year, compared with US$573 billion in the A-share market. 'Together with the recent CSRC measures to enhance regulation in the mainland stock markets, I believe [B-share reform measures] will deepen the mainland securities market as a whole. A deeper B-share market might attract more Hong Kong investors,' Mr Sheng said. Meanwhile, the new code of conduct for regulated persons issued yesterday would provide added protection for investors, he said. The revised code will be implemented on April 1, with the exception of a few provisions relating to telephone recording and client's agreements. The latter will take effect from October 1 to allow more time for brokers to comply with the requirements. The SFC has added two new general principles to the seven international standards already adopted. The new code emphasises the importance of safeguarding client assets and the responsibilities of senior executives at brokerages. It also includes a section on the relaxation of certain requirements relating to brokers who serve professional investors.