Pension fund rule will help stabilize stock market, say experts

Just a day after the lifting of a nine-month suspension for initial public offerings (IPOs), China is making more effort to help boost investor' confidence.

The Ministry of Finance, together with the China Securities Regulatory Commission, said that State-owned firms seeking IPOs on the mainland must give a share to help plug the pension gap.

Companies that sold shares after the structure reform in 2005, and those who do so in future, must transfer State-owned shares equivalent to 10 percent of their IPOs to the National Social Security Fund (NSSF), which would extend the lock-up period by another three years.