The is conducting checks on a further 46 firms about margin-lending activity, Bloomberg said, citing a report by the state-controlled Xinhua News Agency. Other news reports said the regulator was re-starting its inspection of the issue.

Shares in Citic Securities Co, which is the biggest broker in China, were down 2.39 per cent at the close of trading yesterday, outpacing the 1.31 per cent drop in the Shanghai Composite Index of Chinese equities. Shares in Haitong Securities, another large Chinese brokerage, fell even more heavily, down 3.2 per cent.

The regulator’s probe into the brokerage sector has already rattled the financial sector at a time when Chinese policymakers are seeking both to liberalise capital markets while also alleviating the risks of financial blowups.

Earlier in January, the regulator suspended three of the largest Chinese brokerages from adding margin accounts and told securities firms to stop lending to traders with less than RMB500,000 (around $80,000).

There was no reference that this publication could identify to the probe of brokerages on the regulator’s official English-language website.