What is the split share structure, and what is its origin and development?

Split share structure refers to the phenomenon that some listed companies' shares are divided into tradable shares and non-tradable shares in the securities market. Among them, tradable shares refer to shares that can be traded freely in the securities market, while non-tradable shares refer to shares that cannot be traded freely in the securities market, which are usually held by the promoters, executives, employees and state-owned assets of the company.

The origin and development of non-tradable shares can be traced back to the initial stage of the establishment of China stock market. In the1990s, China's securities market just started. In order to protect the holding position of state-owned enterprises, prevent the loss of state-owned assets, and encourage employees within the company to participate in company management, the share-trading system came into being. Therefore, in the early listed companies in China, most of the shares were not tradable, and only a few shares were circulated in the securities market.

With the development of China's capital market and the deepening of reform and opening up, the share-trading system has gradually exposed some problems, such as the inconsistent interests of non-tradable shareholders and tradable shareholders, and the imperfect corporate governance structure. In order to promote the capital market reform, improve the corporate governance structure and promote the healthy development of the market, the China Municipal Government began to implement the share-trading reform.

In 2005, the China Municipal Government launched a pilot reform of the non-tradable shares to solve the problem of non-tradable shares through marketization. In the process of reform, non-tradable shareholders and tradable shareholders reached a share-trading reform plan through consultation to realize the transformation from non-tradable shares to tradable shares. After the completion of share reform, the listed companies in China stock market have basically achieved full circulation, and the phenomenon of non-tradable shares has been eliminated.

The implementation of the share-trading reform has had a far-reaching impact on China's capital market. First of all, it promotes the institutional perfection and healthy development of the capital market and improves the governance level of listed companies. Secondly, the reform of non-tradable shares has improved the investment value of the securities market and enhanced its attractiveness. Finally, the share-trading reform has promoted the internationalization of the capital market and laid a solid foundation for the long-term development of China's capital market.