March 14, 2012 / 1:16 AM / 5 years ago

Shanghai exchange eases block trade restrictions

SHANGHAI, March 14 (Reuters) - The Shanghai Stock Exchange (SSE) plans to extend the trading session and lower the threshold for block trades in a bid to encourage transactions of large blocks of securities and drive innovation.

The move would also "benefit the real economy, financial institutions and investors", the SSE said in a statement of the new trading rules published on its website soliciting opinions from members.

Unlike open bidding of exchange-traded securities, a block trade is a non-competitive, privately-negotiated transaction executed outside electronic markets and is perceived to be a useful measure for analysts to assess where institutional investors are pricing a stock.

SSE said it plans to add a four-hour period for block trades between 4 p.m. and 8 p.m. every trading day. Currently, block deals are allowed only between 3:00 p.m. and 3:30 p.m.

The threshold for block trades will be lowered, with the minimum quantity requirements for stock trades slashed to 100,000 shares or 600,000 yuan from 500,000 shares or 3 million yuan. Minimum requirements for bond and fund deals will also be reduced. (Reporting by Samuel Shen and Kazunori Takada; Editing by Chris Lewis)

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