BEIJING -- China's securities regulator said on Sunday that it will launch the employee stock ownership plan for listed companies at a "proper time" after further improving the draft regulation.

The China Securities Regulatory Commission told Xinhua that it is reviewing feedback on the draft regulation on the shareholding scheme, which was issued to seek public opinion on Aug 5.

The plan, which allows listed firms to buy their own stocks on the secondary market through an assets management agency with a designated part of their employees' cash compensation, is aimed at allowing more staff to benefit from stock ownership.

Employees of listed companies can participate in the plan on a voluntary basis and be entitled to shares according to a distribution agreement, according to the draft.

The ESOP, which will help increase the efficiency and comprehensive strength of a listed company, is a widely-employed mechanism in mature securities markets. China had previously introduced plans that encouraged only senior executives to own stakes in listed companies.