China's stock market regulators have unveiled the fine print of their sweeping new policy allowing domestic investors to buy B shares in a move that has won approval from the market. The regulations guarantee millions of residents holding hard currency in domestic bank accounts can become legal investors in the B-share market. 'This measure is good for the banks and good for the people,' Shanghai mayor Xu Kuangdi said. Economists and market analysts tended to agree. 'The regulations are more liberal than I expected,' said Yao Xinmin, an analyst at Shanghai Finance Securities. 'The fact that investors can use cash deposits at banks [to buy shares] means that there will be a very big impact on the market.' Under the rules, issued by the stock market watchdog the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange, investors need only bring an identity card and US$1,000 and start immediately in a market previously aimed at foreigners. However, stock must be bought with funds in foreign currency accounts at a domestic bank, and those accounts need to have been in place before February 19. Those who did not make the cut-off date will have to wait until June 1. Initially, investors will also not be able to switch banks or shift funds from their city of residence. However, the official media has stressed the temporary nature of these provisions. The policy move could free much of the estimated US$74.9 billion held in individual bank accounts. In the past, investors had taken advantage of legal loopholes to play a market originally aimed at foreign investors. Regulators had turned a blind eye to the trade as foreigners had shown little enthusiasm due to a series of problems, including a severe lack of liquidity. The Monday announcement of the plan came with a suspension of trading on the Shanghai and Shenzhen B share markets for the week. B shares, which are denominated in US dollars in Shanghai and HK dollars in Shenzhen, trade at price-earnings levels that are a fraction of A shares, which are exclusively for domestic investors. Analysts anticipate hard currency share prices might rise to their 10 per cent daily limit for several days once trading resumes next week. In addition, the policy will also ensure there is a paper trail behind the stock purchases. 'There will be a record,' said Xi Junyang, economist and professor at Shanghai University of Finance and Economics. It also could lure back money parked outside the country and encourage it to stay at home, Mr Xi said. However, the prospect of quick gains has unleashed a flurry of black market currency trading as residents try to buy hard currency for B-share trading. That has put some pressure on the yuan on the street-side market. Regulators will ensure this does not have too much impact on the currency, which is not convertible on the capital account. Investors cannot use their B-share accounts to transfer funds abroad, and must return stock market earnings to their bank accounts. 'As a developing country, it is not appropriate for the time being to over-export capital,' a CSRC official said.