China's stock watchdog said its clampdown on illicit securities trading will not impact the market, after Chinese shares slumped unexpectedly on Monday.
The China Securities Regulatory Commission (CSRC) on July 12 started to crack down on capital that enters the market via illegal channels to reduce risks and deflate bubbles, and had cleaned up over 60 percent of trading accounts suspected of illegal financing by Friday.
Of the accounts that dealt with, CSRC spokesperson Deng Ge said, more than 75 percent were legalized and only 6 percent were closed.
"Most of the account holders were cooperative and there was not much forced liquidation," Deng said, "Given the situation, the clean up will not have a significant impact on the market during the rest of the work."
The remainder, less than 40 percent, hold shares worth 187.63 billion yuan (around 30 billion U.S. dollars), the CSRC said.
Chinese shares continued to head south on Monday following weak economic data released over the weekend. The benchmark Shanghai Composite Index dipped 2.67 percent, the Shenzhen Component Index 6.55 percent and the NASDAQ-like ChiNext Index 7.49 percent.
Deng also said the risk in repo remains controllable as only a few accounts were closed due to falling shares.
