CSRC issues draft rules for preferred shares

Regulation will be released in Jan after comments by market players

The China Securities Regulatory Commission released draft regulations on Friday covering the issue of preferred shares, with final rules to be issued next month after comment by market participants.

Under the draft, three types of listed companies can publicly issue preferred shares: Shanghai Stock Exchange 50 index components (the largest by market capitalization); companies planning to acquire other listed companies by issuing preferred shares for payment, and companies buying back common stock that plan to decrease their registered capital by issuing preferred shares as payment.