CHINA will expand and liberalize access to its over-the-counter (OTC) market to all qualified small and medium-sized enterprises (SMEs), the State Council, or Cabinet, announced Saturday.

    The announcement follows reports in domestic media Friday quoting unnamed sources as saying that the reform could happen before the end of the year, with some saying it could come as soon as Dec. 25. But it appears the government moved even more quickly than even insiders expected.

    The China Securities Regulatory Commission, acting under instructions from the State Council, will eliminate approval procedures for applicant companies with 200 or fewer shareholders.

    The announcement also said institutional investors will be encouraged to participate, in particular brokerages, insurance companies, investment funds and foreign funds.

    The move to ease access to the OTC market, which focuses on facilitating private placements in smaller firms, follows announcements that regulators will allow the initial public offering (IPO) market to restart in early 2014.

    China has been consistently trying to expand access to credit for small and medium-sized firms. (SD-Agencies)