The Shenzhen Stock Exchange on Monday broadened the delisting rules for its 2-year-old Growth Enterprise Board, after many companies on the market reported losses this year. The exchange released draft rules that expand and revise the current ones in a bid to improve the quality of companies trading on the board, which was launched at the end of 2009. \"The market has talked about the new delisting rules for quite a long time and finally they came out,\" said Liu Guanwu, an IPO analyst with Analysys International, a Beijing-based consultancy. \"The amended rules, which will delist junk stocks more effectively, will better protect investors\' interests.\" The new rules, posted on the exchange\'s website, stipulate that a company will be delisted if the stock exchange publicly denounces it for three years in a row. Chinese bourses publicly denounce a listed company when they find that it has violated the disclosure rules. Companies will also be delisted if their shares trade below par value for 20 consecutive trading days. In China, most stocks have a par value of 1 yuan (15 US cents ). Stocks with daily transaction volumes of less than 100 million shares for 120 consecutive trading days will be immediately delisted. Previously, they were classified as \"special treatment\" stocks and only delisted if the situation occurred again. Generally, stocks are classified as \"special treatment\" issues after posting losses for two consecutive years, or in cases where net assets a share fall below par value. Public comment will be accepted on the changes for one month before the rules are formally enacted. Liu Huiqing, assistant to the exchange\'s general manager, told Sina Business, the news portal of Sina Corp, that the rules will help in the delisting of companies whose financial indicators don\'t meet the existing standards for removal but that often violate the rules, hurting investors\' interests. The rules will also improve market efficiency. \"The new rules will eliminate the evil members of the herd,\" Liu told Sina Business. The number of listed companies surged from 28 in 2009 to 247 as of Oct 31. About 70 percent of the stocks trade below their issue prices if calculated on a volume-weighted basis, though most companies floated at high price-to-earnings ratios. In the third quarter, 78 companies reported a loss and one-third saw their earnings decline. Last year, 25 companies reported declining earnings in the same year they went public. Changes have also been made to the relisting rules. Companies seek a relisting must meet the same financial requirements as those for IPOs and right issues, meaning that extraordinary items will be excluded when calculating profits. The exchange also said that it doesn\'t encourage backdoor relistings. Liu forecast a substantial effect on stocks under special treatment. Many special treatment stocks \"trade at unreasonably high prices because other companies want to use them to do backdoor relistings,\" he said.