CHINESE mainland stock exchanges should synchronize information disclosure and trade suspension with their counterpart in Hong Kong to create a level of fairness among dual-listed companies, a report by the Shanghai Stock Exchange said yesterday.

The report also suggested mainland exchanges further reduce the number of trade suspensions and shorten the suspension period to raise efficiency. But suspension should be imposed when irregular volatility occurs.

"It is necessary to further connect the markets in the mainland and Hong Kong. The first step is to require dual-listed firms to disclose information and suspend trading at the same time," said the report.

Last year, many large Hong Kong-listed Chinese companies started to trade A shares on the mainland, creating a return of H-shares. This year, several red-chips, or overseas-incorporated Chinese mainland firms, are expected to float shares on the mainland bourses. Therefore there is urgency to establish a system guaranteeing fair trading.

"It is relatively easy to synchronize the time of information disclosure and trade suspension. But how to unify the accounting method is a more important issue," said Zhang Qi, an analyst with Haitong Securities Co.

Also, unlike the practice on the Hong Kong bourse, exchanges on the mainland have too many suspensions which last too long.

The Shanghai exchange issued revised rules in August last year to simplify the suspension system and scrap unnecessary trade suspension.

However, the report said "the current system still creates too many suspensions that disturb regular trading and reduce efficiency."

For example, when publicly-traded companies file regular statements or announce mergers or bond sales through appointed media, there is no need to halt trading.

The trade suspension system was introduced in the mainland in the early 1990s to cater to investors with limited channels to get information.

With the development of the Internet where one can get news speedily, the system should instead focus on how to counter risks and irregular market volatility, the report said.