MAINLAND securities regulator has specified ownership limits for overseas investors buying shares in companies listed on the mainland via the recently announced Hong Kong-Shanghai cross-market stock investment pilot program.

    According to rules published by the China Securities Regulatory Commission (CSRC) over the weekend, a single foreign investor cannot hold more than 10 percent of a company listed on a mainland exchange. The program is set to launch in October.

    The maximum combined holdings of all foreign investors in a single mainland listed firm will be 30 percent, the CSRC announced, but added that these limits do not include stakes held by strategic investors.

    The regulations did not define what it meant by “strategic investors” but on the mainland the term is ordinarily used to describing long-term investors, many of whom typically have their shares subject to a lock-up period extending several years.

    The CSRC published a draft of the regulations in May to seek public opinion. The announcement over the weekend means that rules have now been finalized.

    China announced in April that it would allow cross-market stock investment between Shanghai and Hong Kong in a step toward opening the mainland’s capital account and also letting mainland individuals buy foreign equities overseas.

    The program will allow foreign individuals to buy mainland stocks directly for the first time, although the selection is restricted mostly to dual-listed shares and index heavyweights. (SD-Agencies)