China's securities watchdog urged local regulatory institutions to prepare to trade equities of more small- and medium-sized enterprises.

Expanding a pilot program to trade equities of un-listed companies is crucial to improving the capital market, said Li Xiaohong, secretary of the discipline inspection commission of China Securities Regulatory Commission.

"The key is to innovate new financial products to broaden ways of supporting the growth of the real economy," Li said.

Yao Gang, the vice-chairman of CSRC said in March that "to expand the equity exchange system is one of the key tasks for 2013".

A spokesman of the CSRC said on April 26 that the pilot expansion is still being prepared.

Currently, enterprises from four industrial parks in Beijing, Shanghai, Tianjin and Wuhan in Hubei province can apply for equity transactions on the National Equities Exchange and Quotations.