China to Prevent Abnormal Market Fluctuations, CSRC Says

China to Prevent Abnormal Market Fluctuations, CSRC Says

(Bloomberg) — China vows to maintain capital market stability and will resolutely prevent abnormal market fluctuations, the securities regulator said Sunday as the country’s stock selloff deepened.

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Authorities will actively work with relevant parties and coordinate the implementation of various measures to stabilize the market and boost confidence, according to the China Securities Regulatory Commission.

China’s stock selloff deepened last week, with a key index falling to a five-year low. The CSI 300 Index benchmark gauge tumbled 6.3% in January, a record sixth straight month of losses. That was followed by expectations of a 2 trillion yuan ($278 billion) rescue package and the central bank’s decision to cut banks’ reserve requirement ratio.

CSRC will severely crack down on illegal activities such as market manipulation, malicious short selling, insider trading, and fraudulent issuance in accordance with the law, it added. Earlier, China halted the lending of certain shares for short selling,in a move to support the slumping stock markets.

The authority will also increase efforts to guide more medium- and long-term funds into the market, it added.

(Updates with more details.)

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