BLOOMBERG

Mainland stock exchanges have raised disclosure requirements and barred major shareholders of newly listed companies from selling their stakes within a year, under new rules aimed at boosting investor protection.

The Shanghai and Shenzhen exchanges issued 72 new rules as part of an overhaul of the listing regime that expands the number of regulations by 32 per cent to 295, according to statements published in the country's main securities newspapers.

Regulators are trying to boost investor confidence after the Shanghai and Shenzhen indices fell to five-year lows in September, hurt by corruption scandals, brokerage failures and regulatory probes of companies such as Mongolia Yili Industrial Group.

"The stock exchanges are tightening loopholes and fine-tuning regulations," said Zhang Qi, an analyst at Haitong Securities.

The Shanghai Composite Index has fallen 10 per cent while the Shenzhen Composite Index has lost 9.7 per cent this year, the second and third-worst performers of 60 global benchmarks.

Under the new rules, the chairman and senior management of listed companies must sign statements disclosing their stakes in the company and personal details such as their working history for the previous five years. They must also declare whether they have been punished for breaching securities law, and whether they hold citizenship in other countries.

The rules come as revised regulations on initial public offerings are being prepared by the China Securities Regulatory Commission (CSRC). The regulator in August halted approval of initial stock sales pending rule changes that will allow underwriters to set the price of new offerings.

Wang Xiaoshi, deputy head of the listing department at the commission, was arrested on corruption charges, the official Xinhua news agency said last month.

Yesterday's statements did not say when the commission will allow public share offerings to start again.

"The freeze may be extended as the CSRC needs to revamp its listing committee," Mr Zhang said. Wang's arrest "may only be the tip of the iceberg".

Wang was detained for selling the name list of officials who were vetting a listing application managed by Northeast Securities, the Economic Observer said last week.

The new rules also order companies to make timely disclosure of investment decisions such as the signing of letters of intent for acquisitions or asset sales.

In June, the securities regulator started a probe into Mongolia Yili, one of the mainland's top three dairy producers, for failing to disclose investments.

The exchanges scrapped rules requiring companies to halt trading in their stock for an hour when they publish their quarterly reports. Trading will be suspended only when companies post yearly and half-yearly earnings reports.