Supervision of listed companies in the growth enterprise market will be strengthened and special regulations are ready for unlisted small-scale businesses, in order to prevent illegal stock transactions and protect investors' interests, China's top securities regulator said on Thursday.

The China Securities Regulatory Commission announced it will split the Listed Company Supervision Department into two parts, and one of them will specifically be in charge of regulating companies trading stocks on the ChiNext Board, China's Nasdaq-style growth enterprise board on the Shenzhen Stock Exchange.

"This new department will enhance the supervision of public companies in the growth enterprise market, helping to improve the financing environment for innovative industries," said an official from the commission.

The ChiNext Board, which started trading on Oct 30, 2009, mainly lists high-tech companies and those with high growth potential.

By Sept 9, there were 355 companies on the board with a total share value of 869.1 billion yuan ($138.4 billion), according to the commission.

"The ChiNext has contributed greatly to the development of innovative and strategic emerging industries," the official said.

"The improvement of specific regulations will help to facilitate financing for the real economy."

The other new department will take charge of the regulation of the main board on the Shanghai Stock Exchange and the Shenzhen small- and medium-sized enterprises board.

Besides companies listed on the exchanges, unlisted public companies will also be included in the commission's regulatory system from the beginning of 2013.

Unlisted public companies under the commission's supervision should have more than 200 holders of privately issued shares. Rules related to unlisted public companies were issued by the commission on Thursday.

The commission said key employees can hold their own companies' shares, which would help to encourage their loyalty and prevent illegal transactions.

It also clarified that a stock issuing plan to raise money amounting to less than 20 percent of the company's net asset value within a year does not require the commission's approval.

"The new regulations will encourage unlisted companies to publicize information and prevent insider trading, which will encourage the healthier and more diverse development of China's capital market," the commission official said.

Ba Shusong, deputy director-general of the Development Research Center of the State Council, told China Economic Times that the adjustment of industrial structure and the growth of the private sector require the rapid development of a diversified financial system.

The improved securities regulation of small-scale companies can accelerate reforms in the financial sector and balance the capital market structure between stock and bond financing, Ba said.

chenjia1@chinadaily.com.cn