GUANGDONG is preparing laws for over-the-counter (OTC) trading of stocks as a step to promote the stock trading of non-listed companies, according to Yi Zhenqui. As a director of the province's Securities Supervision and Control Committee, Mr Yi proposed that the second-tier market be specialised for less qualified companies, mostly the small and medium-sized state enterprises. The stock trading would be conducted over the counter. 'The qualifications of the companies entering the system will depend on their organisation and profits. The stock trading will not allow quotations competition,' Mr Yi said. Although he was unwilling to divulge details about the OTC trading scheme, he suggested that the regulation of the OTC lay with the local authorities. Mr Yi believes that the stock trading of non-listed companies will be a means to boost the reform of state enterprises, and the provincial government is taking steps to reform them. The provincial government had already introduced a modernisation programme for enterprises and had injected more than 25 billion yuan (about HK$22.74 billion) into enterprises in the province. Mr Yi said the State Assets Management Bureau, an official body to overlook the assets of state enterprises, would be formally established by the end of the month or early next year. He said a number of holding or investment companies would be set up under the bureau to manage the assets of the state enterprises while the actual business management would be entrusted to the directors of the enterprises. More than 3,000 state enterprises in the province are expected to have had their assets assessed by the end of the year and the rest are slated to go through the process next year, according to Mr Yi. He also said the Guangdong Kelong Electronics Group was one of the seven designated companies in the third batch of H-share companies for listing. on the Hong Kong market.