China's market regulator has barred major shareholders and executives of listed companies from selling their shares for the next six months, it said in a statement on Thursday (Jul 8), the latest government action to stem a slide in the markets.
The move aimed to "maintain stability of the capital market and earnestly protect investors' legal rights", the China Securities Regulatory Commission (CSRC) said on its verified microblog.
The ban applies to "big" shareholders - defined as those with stakes of more than five per cent - company directors, board supervisors and senior executives. Any violations of the ban will be "severely" dealt with, the regulator said, without specifying penalties.
The CSRC will issue further rules regarding how those affected could reduce their stakes after the six-month period, which began on announcement of the rule. The move goes beyond a statement released earlier on Wednesday which "encouraged" major shareholders and company executives to increase their holdings.
Over the past week, China has announced a slew of measures aimed at slowing a slide in the stock market, with the benchmark Shanghai index down 32 per cent by the close on Wednesday from its peak last month. The latest moves include allowing insurance companies to invest more assets in stocks and a programme to buy the shares of smaller companies.
The country's 111 major state-owned enterprises were barred from selling shares in their listed subsidiaries by the State-owned Assets Supervision and Administration Commission, which oversees them.