CHINA’S securities regulator said Friday it would mete out increasingly tough penalties on fraudulent listings, accounting scams and misappropriation of funds by big shareholders, as part of a crackdown to boost confidence in the stock market.

In its first news conference since the Lunar New Year holiday, the China Securities Regulatory Commission (CSRC) also said it would target insider trading and market manipulation more precisely, removing regulatory blind spots.

As investors anticipated forceful measures to boost the market, China’s blue-chip CSI300 Index rose for its ninth straight session Friday, having rebounded 12% from five-year lows hit early this month.

In the two weeks since veteran regulator Wu Qing was appointed CSRC chairman, the watchdog has increased scrutiny on computer-driven quant trading, and punished breaches of market rules.

“Punishment will be more and more severe, and the cost of law-breaking will only be higher and higher,” Li Ming, head of the enforcement bureau of the CSRC told reporters in Beijing.

“For a market to be prosperous and thriving, the key is to make everyone believe the market is fair and just.”

Yan Bojin, head of the CSRC’s department of public offering supervision, told the same news conference share issuers will face heavy penalties for accounting fraud, and the watchdog will conduct more on-site inspections.

Yan denied reports that the CSRC is planning to inspect a decade of financial data from listed companies.

“The fact that the media reported [that we might have this plan] reflects the concerns and attention investors have for listed companies,” he said, adding that preventing and punishing financial and issuance fraud was “a continuous process.”

The CSRC said in a post-holiday meeting last Monday that it will weed out unqualified listing candidates to fundamentally improve the quality of public companies, as well as to deliver better returns for investors.

Yan said the regulator will punish all illegal activity and rule breaches that hurt the interests of investors “without mercy,” using “the power of regulation” to deter unqualified businesses from listing, thus enhancing the quality of IPO candidates from the source.

Investors expect the CSRC to announce more measures in the coming weeks. Its new chairman Wu has held a series of seminars with market participants to solicit proposals to reinvigorate the market.

(SD-Agencies)