China intensified its crackdown on securities fraud yesterday, issuing new rules that allow investors to take legal action against a wider range of financial crimes.

The Supreme People's Procuratorate and the Ministry of Public Security jointly announced that those who took advantage of insider information and made profits of more than 150,000 yuan (HK$167,610) could be sued in court.

The new rules are harsh and cover a wider range of securities fraud that will be subject to legal actions, said Gong Zhenhua, a partner at Ronghe Law Firm in Shanghai. It is a sign that the government will tighten regulations on the stock market.

The rules also stipulate that prosecutors should take action against firms that inflate or hide corporate profits by more than 30 per cent.

Firms that manage assets for clients will also be punished if they breach the agreement with the principals and embezzle funds exceeding 300,000 yuan, according to the rules.

In tandem with the rapid development of the country's capital market, stock and futures crimes are increasing with some new characteristics, the top prosecution office said. To efficiently tackle the problem, the rules were made more detailed to address unlawful behaviour.

The move is in line with Beijing's pledge early this year to weed out market irregularities.

The China Securities Regulatory Commission said in January that it would join the People's Supreme Court, the top prosecution office and the public security ministry to step up the crackdown.

A group of cases would be subject to legal procedures soon, the CSRC said at that time. Mainland police investigated 366 cases related to securities fraud last year. Forty-eight people were detained and investigated.

The rules draw a clearer legal line for the police, prosecutors, lawyers, judges and market players so that they can better understand the law, said Liu Chunquan, a lawyer at Guangsheng & Partners.

The authorities obviously hoped to fine-tune the criminal law to ensure social stability.