China's market regulators have urged listed companies to tighten the interior control on their market decision-making processes.

Regulatory authorities jointly released the "Basic Regulation on the Interior Activities of Corporations."

The rule regulates how companies reveal information and sets stricter controls on how they make decisions about their business performance in the market.

Vice finance minister Wang Jun says the regulation will facilitate the healthy development of enterprises and the financial market together with other related market regulations.

Zhang Lianqi, a financial expert, explains what kind of role the regulation will play.

"Before the release of the regulation, many corporates' business performances, like investments, were vulnerable to failure. The decision-making process is sometimes not democratic. When it comes to exchanges and trades between enterprises, there is a lack of an effective and transparent monitoring mechanism. With the newly released regulation, corporations will have to tighten their interior controls on key decision-making processes."

Listed companies must first implement the regulation.


Regulators also are urging unlisted companies to abide by the rules as soon as possible.

The new regulation will come into effect in July next year.