(Yicai Global) Nov. 22 -- Shanghai's stock exchange has proposed to tighten its rules on the maximum time that listed firms may withhold from share trading. 

The Shanghai Stock Exchange issued a draft of a new set of rules yesterday, which suggested that the generally acceptable suspension period should be shortened to 10 days. Firms that are going through prolonged restructuring, could apply for an extension which would bring the maximum break up to 25 days. The policy draft seeks public comment. 

Once returning to the capital market, the firms should also disclose their plans for organizational changes. Those firms that wish to extend their absence from the bourse would need to provide additional information to the regulator, including their underlying assets, the counterparty, and transaction methods.

The policy shift aims to strengthen communication and clarify the responsibilities of listed firms, a chief at the SSE said. 

Companies' abuse of the suspension rules in China's domestic share market has always been rampant, which not only harms investor interests but also hinders international investment funds' entry into the Chinese stock market, the boss added. 

On Nov. 20, the Shenzhen Stock Exchange stipulated that Chinese property firm Yinyi must continue trading after putting its equity on hold for three months. The stock [SZ:000981] fell almost 10 percent to close at CNY5.07 on its first day back to business. Yinyi said that it was going through some restructuring issues before putting its share on hold in August. 

Editor: Emmi Laine