(Bloomberg) -- China’s stock regulators say they will remove a limit on the public float of mainland companies listed in Hong Kong -- a change that would shake up the ownership structures of some of the nation’s biggest firms.

The China Securities Regulatory Commission said in a statement on Friday evening that qualified companies listed or planning an initial public offering in the city can apply for “full circulation” of their shares. The change requires regulatory approval, it added.

Chinese regulators have been preparing to expand a pilot allowing mainland firms listed in the former British colony to convert their non-tradeable shares to H-shares and trade them on the city’s stock exchange. The program has been seen as a key step for state investors to reduce their control or even exit some industries.

“Full-circulation is relatively a good thing for investors as it could improve liquidity for these stocks,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “However, if there is sharp increase in tradeable shares, it would raise investor concern over the impact on the market.”

The CSRC said in its Friday statement that it successfully conducted a pilot involving three companies in 2018.

Some of China’s biggest and most-high profile firms trade in Hong Kong, including its big four banks, oil giants and insurers.

To contact Bloomberg News staff for this story: Ken Wang in Beijing at ywang1690@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Philip Glamann, David Watkins

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