One policy newly introduced was to rein in the expansion of investment funds, after their total number reached more than 80 last year.

In another move, stricter rules were introduced on board members' selling their stocks.

Last Thursday, CSRC introduced additional requirements for companies' information disclosure. Still more requirements are on the way, it said, for the more volatile financial and real estate sectors.

Both Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress, and Shang Fulin, CSRC chairman, stated recently that the focus of market regulations is not the index, but how to provide investors with a fair and transparent environment.

In practice, since the end of 2006, more and more listed companies have also been trying to seek a more clear-cut separation of their interests with that of their parent companies to win over investors.

But as the central government is trying hard to cool down the real estate market, more investment money will be pushed into equities, as Frank Gong, chief economist of JP Morgan Securities Greater China, points out.

Therefore, analysts suggest, it would be important to have more investment channels for the domestic money.

"If the index goes up another 20 to 30 percent in the coming few months, the regulators could make a more serious effort to stem the bank finance to equity investment, and the unauthorized inflow of overseas funds," said Ma Jun, chief economist of Deutsche Bank Greater China, at a conference in Beijing last week.

In January, the China Banking Regulatory Commission, the regulator of the Chinese banking industry, also ordered commercial banks to guard against loan requests by potential stock market players.

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