BEIJING, May 10 -- China's two stock exchanges will limit executives at mainland-listed firms to trade only a quarter of the stakes they own in the companies within a year as part of rules to boost supervision of trading by corporate insiders.

    The exchanges will calculate stock holdings by a listed firm's board of directors, supervisors and senior management at the end of each year, according to the rules unveiled Wednesday on the bourses' Websites.

    The upper limit of shares executives at public companies can dispose of in 12 months will be capped at 25 percent of their holdings if there are no other lock-up stipulations, according to the rules.

    Executives suspected of illegal share trading will be barred from unloading their shares, the rules said. They also can't sell the stakes within one year of the firm's initial public offering or six months after they leave the firm, the rules continued.

    "As the market maintains its bullishness, it's necessary to take measures to curb potential misconduct such as insider trading," said Lin Weimin, an Orient Securities Co trader. "The rules can help better supervise stock dealings by company officials and reduce stock-price volatility."

    Chinese financial regulators have been stepping up moves to combat insider trading and share price manipulation as the nation moves to prevent the bull run from growing sour.

    Authorities last month started to probe several fund managers and executives at listed firms on suspicion of their reaping illegal profits from receiving price-sensitive news ahead of the public.

    Listed companies must reveal details of trading of shares by executives within two trading sessions after the transactions are done, according to the rules.

    (Source: Shanghai Daily)