The new market is designed to be a platform for fledgling high-tech and growth enterprises to transfer shares and raise funds for specified use.

Pilot areas will be expanded to the Zhangjiang High-tech Industrial Development Zone in Shanghai, East Lake High-Tech Development Zone in central China's city of Wuhan and the Tianjin Binhai High-Tech Industrial Development Area, an unnamed official with the China Securities Regulatory Commission (CBRC) said.

"The move will be conducive to strengthening support for private, small- and medium-sized businesses," the official said.

The OTC board is one of a series of recent measures by Chinese policymakers to expand access to credit for small and private firms that have largely been shut out of China's financial system, which is dominated by state-owned banks lending to state-owned companies.

China has already established two regional OTC stock markets in Shenzhen and Shanghai. In 2006, it added Beijing's Zhongguancun Science Park as a pilot zone.

Commenting on whether the new markets will leech capital from the main trading board and dampen investor enthusiasm, the official said the impact will be "very limited" due to the small scale of the funds raised.

He cited Zhongguancun Science Park as an example. In the past six years, 100 companies participating in the trial program raised 1.73 billion yuan (272.87 million U.S. dollars).

He said that the new OTC market will help relieve pressure on the two bourses in the Chinese mainland and stabilize market expectations.