China will launch a pilot program for preferred stock issues by both listed and non-listed companies, the China Securities Journal reported Monday, citing a set of guidelines released by the State Council. The China Securities Regulatory Commission said it will seek public views on the draft rules before their official release. Under the guidelines, preferred stocks issued by companies cannot exceed 50 percent of the total common shares, and fund-raising should not surpass 50 percent of the companies’ net assets before public listing, while repurchased and convertible preferred stocks are excluded, the paper said. Deng Ke, a spokesman for the commission, was quoted as saying preferred stock issues could help optimize companies’ shareholding structure and boost investor confidence.
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