Insiders said the scheme would block entry for companies already listed on the main board. The concern is over division of assets to list on a second board.

There was also concern that the plan would discourage big state-owned enterprises to look for a dip on the second-string market.

The debate comes as China's securities authorities have just completed another round of amendments of the listing rules of the yet-to-be-unveiled second board market.

Of course, "the rules have not been decided yet and may be changed again", said an official with Shanghai Securities Exchange.

"But the new version is likely to gain more favour as it prevents a repetitive entry to the market," he told China Daily.

If passed, the rules will certainly exert a heavy blow on many listed domestic companies seeking further capital expansion in the new market.

Some of them, including high-tech heavy weight Tsinghua Tongfang, have announced plans to put their subsidiaries in the high-tech dominated second board.

But such a move would affect the fund-raising capability of other newborn businesses that still have not got a dip into the stock market, analysts said.

A securities insider said the move would be unfair for the unlisted companies.

(People's Daily)