Thursday, December 14, 2017

China revises rules on securities insurance

A new regulation is in place starting Tuesday that will give insurance funds priority to subscribe to new shares offline in China.

The country’s move is seen to benefit the public and boost market-oriented stock pricing.

Based on the revised regulations, at least 40% of new shares placed offline are required to first seek public offering funds, social security funds and basic pension funds, according to the official website of Legislative Affairs Office of the State Council.

In addition, a certain proportion of new shares should also seek enterprise annuity funds and commercial insurance funds.

At present, China adopts the three-pillar pension system. Under the scheme, the first pillar is basic pensions led by the government with the characteristic of wide coverage and low security. The second pillar involves enterprise annuities, and the third is commercial.

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