In an anticipated bid to introduce a new type of stocks in the market, the China Securities Regulatory Commission  (CSRC) released a new guideline in the disclosure of information for 'preferred stocks.'

In China, the preparation of a stock issuance plan and a profile is already a mandatory requirement but based on its new policy, stock issuance now requires the amount of preferred stocks to be issued, the amount per share, its yields and terms for the stock buy-back.

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Companies seeking to get fresh new capital through the markets need to include a description on the purpose of the issuance including the position of board of directors in issuance of the stocks.

The profile or pro forma of the issuance should also feature the risks involved. The CSRC also required companies to post these information in their respective websites.

In the stock market, companies can issue share offerings that are either the common shares and the preferred stocks.

Holders of preferred shares gave priority rights in the distribution of residual assets and annual profits unlike the common shareholders.

However, preferred stockholders have no voting rights in the companies' policy direction.

The issuance of preferred stocks in Chinese markets is expected to open up new lines and instruments of investments for companies.