1. Rules for a pilot program allowing companies to issue preferred shares:

Three types of listed companies can publicly issue preferred shares: Shanghai Stock Exchange's 50 index members (the largest by market capitalization); companies planning to acquire other listed companies by issuing preferred shares for payment; companies buying back common stock that plan to decrease their registered capital by issuing preferred shares as payment.

Other domestically listed companies can conduct private placements of preferred shares through stock exchanges, as long as they comply with Chinese laws.

Unlisted domestic companies and Chinese firms listed abroad can apply for private placements of preferred shares through the National Equities Exchange and Quotations, the so-called "third board". This is an equity exchange system for small and medium-sized enterprises.

Listed companies are not allowed to issue convertible preferred shares to ensure common equity isn't diluted.

2. New measures to improve new share listing reform:

The amount of shares transferred from existing shareholders should be no greater than that of new shares purchased by investors willing to hold them for at least 12 months.

If the amount of shares subscribed by online investors is more than 150 times greater than the original quota, at least 90 percent of shares in the entire IPO should be sold online.

An offline investor should hold tradable shares totaling no less than 10 million yuan ($1.63 million).