CHINA’S securities regulator said it will launch an investigation into suspected manipulation of shares after recent sharp declines in the stock markets.

    Zhang Xiaojun, spokesman for the China Securities Regulatory Commission (CSRC), said the regulator has tracked irregularities between securities and futures trading and it will transfer any criminal cases to the police.

    Zhang said the CSRC has set up a team to look at “clues of illegal manipulation across markets.” He also said that China’s official margin lender for brokerages, which makes loans available for stock market investment, would boost its capital base to 100 billion yuan (US$16 billion) from 24 billion yuan to expand its business.

    China Daily said Friday that the CSRC was probing investors who used stock index futures to short the market - or bet on prices falling.

    Sources with direct knowledge said that the China Financial Futures Exchange (CFFEX) had suspended 19 accounts from short-selling for a month.

    After market close Friday, the CFFEX said it was introducing transaction fees on futures contracts on three indices and strengthening the market to combat short-selling activities.

    Zhang’s remarks came as a sharp sell-off in China’s stock market has rattled investors. The benchmark Shanghai Composite Index has fallen about 27 percent since June 15. (SD-Agencies)