China’s securities regulator issued rules on Thursday to restrict share sales by listed companies’ major shareholders, saying the move will stabilise market expectations but doesn’t signal an imminent exit of the “national team” of investors.

Under the circuit breaker system, markets were suspended for 15 minutes if the CSI 300 index of Shanghai and Shenzen stocks fell by five per cent.

Some analysts said the rules were less draconian than expected, as the restrictions do not apply to shares acquired in the secondary market, or share sales outside the exchanges’ bidding system, such as block trades, or negotiated transfers.

While China’s economy is showing signs of stability after decelerating to its slowest annual pace since 1990, investors are concerned how deftly, or ineptly, the authorities will manage its equities and the currency.

The regulator’s statement came after the benchmark Shanghai Composite Index suffered a 10 percent loss in a week, with market shutdowns on Monday and Thursday triggered by the circuit breaker mechanism.

As the heavy loss in the stock market this week coincided with the new circuit breaker mechanism, there was also debate over whether the mechanism has produced the desired effects.

Authorities say shares bought by state companies will be transferred to China’s sovereign wealth fund to avoid depressing prices by selling them in the open market. “Investors need time to adapt to the new rules”.

This was a troubling development after US markets posted another turbulent session Wednesday as investors got blindsided by yet another early-year shock: claims from North Korea hat it successfully tested a powerful hydrogen bomb. If the Hushen 300 declines by over 7 percent, trading is halted for the day. The sell-off was in part due to fears that a regulatory ban on share sales imposed during last year’s summer rout will expire on Friday. The latest geopolitical flare-up in an increasingly volatile world prompted investors to sell stocks and reduce risk. Chen Gang, who helps oversee the equivalent of$46m as the chief investment officer at Shanghai Heqi Tongyi Asset Management, dumped his firm’s equity holdings. The index dived a further 2 percent in just 2 minutes after reopening at 9:57 a.m., and trading was ceased.