China strengthens stock market trading and listing supervision

SHANGHAI (Reuters) - China's securities regulator issued draft rules on Friday to strengthen supervision of company listings, delistings and quantitative trading, in a move aimed at improving the stock market and protecting investors' interests.

According to the draft rules for public comment, the China Securities Regulatory Commission (CSRC) has strengthened the delisting requirements to force unqualified companies out of the market and vowed to step up audits of delisted companies.

In order to improve the quality of listed companies, the China Securities Regulatory Commission (CSRC) said it plans to appropriately raise the requirements for operating revenues and net profits for companies listed on the Main Board and the Growth Enterprise Market (GEM), which is dominated by technology stocks. The SFC will also expand on-site inspections of IPO audited companies and related intermediaries.

The proposed measures come after China's stock market fell to a five-year low in February, where a series of measures were put in place to revive investor confidence.

The China Securities Regulatory Commission (CSRC) has also proposed to impose more stringent and differentiated regulatory requirements on high-frequency trading, and to safeguard market fairness through the implementation of an additional reporting mechanism and the charging of differentiated fees.

China's quantitative funds, which use derivatives and data micro-computer models, are facing stricter scrutiny. In February, the stock exchange banned a fund from trading for three days, saying it violated orderly trading rules.

The China Securities Regulatory Commission (CSRC) added that both domestic and foreign capital will be included in the transaction reporting system and will be subject to the same transaction monitoring standards.

(Reporting by Shanghai and Beijing newsrooms; Editing by David Goodman and Susan Fenton)