China's State Council on May 9 issued a notice detailing nine guidelines for accelerating the healthy development of the nation's capital market, the so-called "new nine rules," following the previous "nine rules" unveiled in 2004 to build up the capital market, the Chinese-language Beijing Business Today reports.

In 2004, China's cabinet unveiled nine rules which offered preferential policies for the capital market, boosting the A-share market. Now faced with new public listings, the Shanghai Stock Exchange Composite Index (SHCOMP) is striving to maintain itself above 2,000 points and the Growth Enterprise Market (GEM) has seen continuous decline, leading many commentators to question if the new nine rules can boost the market like the old nine rules.

The reform on public listings is seen as the most important of the new rules. The notice stated that the government is in the process of seeking conditions, listing standards and screening procedures that are appropriate for China's actual situation.

Zhao Xijun, associate dean of the School of Finance at Renmin University of China in Beijing, said that the new mechanism for listing is an inevitable choice because it can better meet the requirements of marketization. The restrictions on the IPO registration system are apparently fewer than those of the screening mechanism, Zhao said.

The notice said the council will guide securities and futures firms to develop orderly internet business models, and establish supervisory rules to make the internet finance business healthy, without elaborating further. Experts said the top leaders support the internet finance business, but the central bank has strengthened its supervision on such operations in a bid to prevent systemic risks, encouraging innovation while demanding firms to follow the rules.

The notice stated that a new tax policy will be implemented to help develop the capital market, with some experts interpreting this to mean the policy will cut or abolish the current stamp duty for the capital market.

The new rules also include a plan to gradually relax restrictions on the stake a foreign fund can own in a listed company, which could mean the expansion of foreign funds' investments in domestic securities and futures companies, which would see foreign funds investing more in A-shares, the report said.

Other plans include introducing a thorough plan for delisting, allowing new licenses for securities brokerages, strengthening supervision of the bond market, and establishing transparent guidelines to regulate and supervise private equity funds.