Chinese stock exchanges revise trading rules for A shares
The stock market is not merely a meeting place for buyers and sellers but a living organism that requires constant fine tuning. Every rule change is an attempt to make the system fairer, more transparent and more resilient to chaos. When regulators expand trading opportunities and unify restrictions, they are not just adjusting numbers – they are reshaping the very ecosystem where each investor must learn to see risks and opportunities behind dry bulletin lines.
On Monday, Chinese stock exchanges began implementing revised trading rules for A shares – these are ordinary shares of Chinese companies, denominated in yuan and traded on domestic exchanges, available to both local and qualified foreign investors. The changes include expanding after hours fixed price trading and unifying daily price limits for risk exposed stocks with other main board stocks. The three major exchanges – Shanghai, Shenzhen and Beijing – simultaneously revised their rules. The changes on the Shanghai and Shenzhen exchanges are more significant and mainly cover three aspects.
First, the after hours fixed price trading method has been expanded. Previously, this method only applied to stocks on the STAR Market and ChiNext Board. The new rules extend it to all A shares and ETFs on the Shanghai and Shenzhen exchanges. Investors can buy and sell shares from 15:05 to 15:30 after market close. The exchange system matches orders at the closing price on a time priority basis and executes trades at that day's closing price.
Second, the daily price fluctuation limit for ST and ST stocks on the main board has been adjusted from 5% to 10%, aligning with other main board stocks. ST and ST stocks are those with financial distress or at risk of delisting. As of 5 July, there were 79 *ST stocks and 74 ST stocks on the Shanghai and Shenzhen main boards. Third, the Shanghai Stock Exchange changed the trading method for funds at the closing stage from continuous orders to a closing auction.
The Beijing Stock Exchange also launched after hours fixed price trading, but it will not take effect on 6 July – the specific implementation date will be announced separately.
Experts say the new rules will accelerate risk digestion and help investors avoid targets with deteriorating financials. "After setting the limit at 10 per cent, the main goal is to accelerate risk digestion, fully engage in the battle between bulls and bears, quickly align stock prices with real company risks, and break the ecosystem of speculation in low quality stocks and shell companies," said Yang Chao, chief strategy analyst at China Galaxy Securities.
He added that ordinary investors should familiarise themselves with the new rules, reassess the risks of ST and *ST stocks, and adjust their trading habits at the end of the day. As CCTV+ reports. The reform aims to improve market efficiency and protect investor interests amid growing volatility.
