Xiao Gang, the head of China's beleaguered top securities regulator has offered to step down, as per insider sources in the securities market.

China Securities Regulatory Commission (CSRC) Chief Xiao Gang came under severe criticism last week after his much talked about innovative method 'circuit breaker' ended up wiping out more than $5 trillion off the capitalization of the Shanghai and Shenzhen stock market.

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Xiao, who is known for his self effacing demeanor, introduced the 'circuit breaker' method into the market last week Monday with the promise that it would limit stock market losses. But his so called innovative method exacerbated the stock market losses further. As a result Xiao's 'circuit breaker' method was deactivated on Thursday.

Although CSRC said on Monday that reports of its Chairman Xiao Gang planning to step down is inaccurate, some close sources have claimed otherwise.

"The (Communist Party) central (leadership) is extremely unhappy with Xiao Gang," a source close to the Communist Party has revealed.

Another source with knowledge of the situation said that "Xiao Gang handed in his resignation last week".

Meantime, news is already abuzz in some quarters of the financial market that the Communist Party's Organization Department, or Personnel Ministry, has already short-listed three candidates to replace Xiao Gang.

Xiang Junbo, Chairman of the China Insurance Regulatory Commission (CIRC), and Huang Qifan, Mayor of the southwestern metropolis of Chongqing, are believed to be two of the shortlisted candidates.

The name of the third candidate is still shrouded in secrecy.

TagsXiao Gang, Chinese Stock Market, Shanghai Stock Exchange