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Chinese regulators have asked banks to hold off on company listings and large stock sales in a bid to prop up the country’s struggling stock markets.
The China Securities Regulatory Commission has held meetings with investment banks and issued informal instructions — or “guidance windows” — in recent days regarding suspending IPOs, according to three people with knowledge of the discussions.
Significant sales by existing shareholders have also been temporarily suspended until markets recover.
Mainland China’s benchmark index, the CSI 300, fell 8.5 percent in October, its worst month in more than a decade. It’s down 15 percent this year, while the S&P 500 has gained 10 percent.
Chinese stocks have been mired in a prolonged downturn since the summer, pressured by macroeconomic issues and growing skepticism about AI investments. The tax crackdown on offshore trusts has also prompted some billionaires to sell shares to pay their taxes, further weighing on markets.
Previous interventions, ranging from state-backed fund buybacks in July to recent regulatory measures limiting stock sales, have failed to reverse the decline.
Chinese policymakers have already slowed the pace of IPOs during market downturns, in an effort to preserve liquidity.
The move threatens to dampen trading in China’s stock markets, which have shown signs of recovery after a prolonged slowdown. IPO trading volume this year reached more than RMB 292 billion ($44 billion) – the highest since 2023 – according to Bloomberg data. Chipmaker YMTC is a company that was supposed to list this year, but has not yet done so.
The new measures add to earlier forecasts last month that called for stabilization methods such as accelerated stock buybacks and asking investors to curb stock sales, according to the sources.
These measures “were unlikely to generate a lasting recovery unless they were coupled with something that more directly addressed structural challenges,” said Thomas Mathews, head of Asia-Pacific markets at Capital Economics. “That means boosting profit growth, which in the short term will likely mean monetary or fiscal support.”
On Monday, the CSRC, the People’s Bank of China and the National Financial Regulatory Administration said they held meetings with securities brokerages and fund companies on ways to stabilize stock markets. The measures include reducing the rate of its loan facility for share buybacks from 1.25 percent to 1 percent, strengthening swap operations and encouraging share buybacks.
Market reaction was muted on Tuesday, with the CSI 300 index closing down 0.2 percent and the tech-focused Star 50 index down 3.8 percent, while Hong Kong’s Hang Seng index gained 0.6 percent.
Sam Konrad, investment manager at Jupiter Asset Management, said: “This is an example of why we do not have a fundamentally positive view of the long-term outlook for China’s stock markets. It suggests that China’s stock markets are dependent on government support to try to boost them.”
He added: “Over the long term, Chinese stock markets are among the worst performing stock markets in the world. We believe that China’s economic system means that growth does not translate into profit growth.”
Jason Lui, head of Asia Pacific equity and derivatives strategy at BNP Paribas, said: “While these policies may not trigger an immediate reversal in sentiment similar to that of September 2024, they present medium-term opportunities for investors looking to accumulate exposure to China A-shares.
Chinese stocks rebounded in September and October 2024 after regulators unleashed a wave of stimulus measures, including two central bank liquidity facilities designed to help brokers and institutional investors buy stocks.
The rally accelerated further in early 2025, when DeepSeek’s breakthrough prompted global investors to reassess Chinese tech stocks. But confidence has been shaken by Donald Trump’s tariff war, which prompted Beijing to mobilize state-backed funds, known as a “national team”, to help set a floor for Chinese stock markets starting in April last year.
However, the national team’s series of ETF and stock sales in the first quarter of 2026 have renewed doubts about the sustainability of the recovery.
The CSRC did not immediately respond to a request for comment.
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