SHANGHAI (Reuters) - China’s stock regulator is considering a scheme under which listed companies can buy back shares and use them pay up to 30 percent of wages and bonuses for staff, its latest move to help boost the country’s sagging stock market.
In draft rules published over the weekend, the China Securities Regulatory Commission (CSRC) said the shares issued to staff would have to be bought on the secondary market, which would support stock prices, and staff must hold the shares for at least 36 months.
Shares held by staff members must not exceed 10 percent of a listed company’s outstanding shares in total, and a single employee could hold no more than 1 percent, according to draft rules published on the regulator’s website, www.csrc.gov.cn.
The regulator is seeking public comment on the proposed changes by August 17. Draft rules are typically brought into effect with only minor changes two weeks to a month after the deadline for comment.
The CSRC has recently taken a slew of steps to boost China’s stock market, including cuts to transaction fees and encouraging China’s 2,000-plus listed companies to buy back their own stock.
The benchmark Shanghai Composite Index .SSEC hit a 3-1/2 year low last week amid worries over a slowdown in the pace of growth in the world’s second-largest economy and a stuttering recovery elsewhere.
Reporting by Lu Jianxin and Pete Sweeney; Editing by Richard Pullin