China will strengthen regulation to fend off risks in the capital market and maintain its stable and healthy development to boost investor confidence, Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC), said Wednesday.

Excessive or out of control leverage, imbalance between innovation and regulation, fraud and breach of duty are among the main causes of risks in the financial market from the perspective of development law and regulatory practices in recent years, Yi told the Annual Conference of Financial Street Forum 2023.

To fulfill its responsibility in financial market regulation, the commission has taken measures to promote innovation under the premise of prudential supervision, strictly guard against excessive leverage and adopt a "zero-tolerance" principle in cracking down on violations and misconduct in the securities market, Yi said.

In the next stage, the commission will take multiple steps to continuously improve the adaptability and pertinence of regulation and hold the bottom line in guarding against risks, to maintain the smooth operation of the capital market and boost investor confidence.

Work will be done to cooperate with public security and judicial organs to continuously optimize the anti-counterfeiting system and mechanism in the capital market.

Yi noted that the introduction of the registration-based initial public offering system was by no means a relaxation of oversight, but rather a better combination of an efficient market and a well-functioning government. Efforts will be made to promote dynamic evaluation and optimization of pricing, reduction, refinancing and other institutional arrangements, implement various supporting policies for the market entry of medium- and long-term capital, and support securities institutions to improve professional investment capabilities and market leadership.

The commission will strengthen the tracking, research and judgment of quantitative high-frequency trading and improve regulatory measures, while shoring up comprehensive monitoring of market leverage levels and corporate debt risks by carrying out early identification, warning, exposure and disposal of all kinds of violations and risks.

It will also bring all types of securities activities under supervision in accordance with the law, and apply strict access to private equity funds and other fields in order to eliminate regulatory gaps and blind spots, Yi added.