China's securities regulators are considering a plan to allow listed companies to sell their unlisted shares on a case-by-case basis.
Investment bankers in Beijing said the policy would allow the 66 per cent of shares that could not be traded on the exchange to gradually become part of the market. It would also give the China Securities Regulatory Commission (CSRC) an exit strategy if the plans proposed by individual companies sparked a negative reaction from the markets.
'It's not official yet. If one or two companies do something investors do not like, they can put a hold on it,' said the head of investment banking for one western firm.
He said the regulators 'will probably start with smaller companies and let illiquid shareholders talk to liquid shareholders to get an ad hoc solution'.
State shareholders would work through a middleman, such as an investment bank, to devise a method of selling their shares, with the goal of increasing the liquidity of the market, according to mainland press reports.
