China's stock market regulator said on Sunday that 42 companies, including some of the country's biggest and best known corporate names, would take part in the second stage of its planned reform of the shareholder structure of listed companies that is seen as crucial to the future of the stock market.

Baosteel, China's biggest steel company, and oil company Sinochem International are among the companies that will begin unwinding their large holdings of non-tradeable shares and in some cases will float the shares on the stock market.