Exchanges in China Look to Speed Delistings SHANGHAI - The two China stock exchanges said Sunday that they wanted to make it easier to delist companies so investors" interests would be better protected. The Shanghai Stock Exchange and the Shenzhen Stock Exchange are asking for public feedback on planned changes by May 20, according to statements on their Web sites. Current procedures do not "fully serve their purpose," and the changes should allow swifter removal of companies from trading and a faster path to relisting, according to the Shanghai exchange's statement. "Improving the delisting rules will allow capital markets to work more efficiently, improve the quality of listed companies and protect the interests of small investors," the Shanghai exchange said. Among the proposed changes, companies with negative net assets would no longer remain listed, and the exchange would use net income, excluding one-time gains, of companies seeking to relist as the benchmark for a true picture of their profit. Guo Shuqing, who was appointed as China's top securities regulator in October, has pledged to fight insider trading and misconduct in the nation's securities markets. The China Securities Regulatory Commission is studying ways to make its delisting policies more effective because companies use loopholes to avoid removal, according to an April 20 statement on the agency's site. The securities regulatory commission may exclude nonrecurring items from net income, as some unprofitable companies use government subsidies or other sources to book profits and avoid delisting, according to its statement. Companies are taking advantage of 2007 accounting-rule changes that allowed one-time gains to be counted as profit, it said. Other criteria being considered by the exchanges are annual revenue and trading volume, according to the statements on Sunday. In November, the Shenzhen exchange proposed new rules for delisting stocks on the ChiNext market, a board for startup businesses. Companies would be delisted if they were censured by the exchange three times during a three-year period, if their shares closed below an established minimum value for 20 consecutive days, if combined trading volumes fell below one million shares for 120 consecutive trading days or if net asset values were negative for two consecutive years. Also Sunday, China's securities regulator released new rules for initial public offerings, saying the changes should make share prices "more reasonable" and improve disclosure, Bloomberg News reported from Shanghai. The guidelines set out the responsibilities of issuers and other organizations involved in an I.P.O., including law and accounting firms, and pledge to punish illegal practices, according to a statement posted on the China Securities Regulatory Commission's Web site. Underwriters may invite 5 to 10 individual investors to participate in the pricing procedure, according to the new rules, in addition to the seven types of institutions currently allowed.