The General Office of the State Council has issued a regulation clarifying the role of regional equity markets and introducing new criteria for investors.

The new regulation makes it clear that the function of regional equity markets is to provide financing channels for local micro to medium-sized businesses within their provincial boundaries.

A qualified investor system will also be established to ensure only legal entities, joint ventures, and individuals in a strong financial position with a sound background are able to invest.

Local authorities and central government departments will work together to supervise regional equity markets.

Provincial-level governments will be responsible for market oversight and risk assessment, while China Securities Regulatory Commission will be responsible for specific regulations on the issuing of equities.

Each regional market is allowed to have only one operating agency.

The regulation also aims to encourage more private investment.