China will take measures to attract more medium- and long-term funds into stocks, the South Council said on Friday as it announced tighter rules for companies to maintain listings and a crackdown on improper trading practices in a drive to establish a high-quality equity market within five years. (See MNI INTERVIEW: China To Strengthen Stock Market Oversight)

China will encourage development of equity mutual funds and facilitate equity investment by insurers, social security funds and pension funds, as well as by bank wealth management and trust funds, the State Council said.

Regulators will address risks in private equity funds, improve market-oriented mechanisms for handling bond defaults, and crack down on debt evasion, it said. It will also enhance supervision of high-frequency quantitative trading and curb illegal activities such as market manipulation and malicious short-selling. Supervisors will enhance the registration-based system for stock issuance and encourage listings by companies in new industries and high technology.