China stocks regulator says to deepen reforms, markets more stable

Says is looking into 'circuit breaker' system that would halt trading in response to substantial drops

China's stocks regulator said it plans to deepen reforms and bolster supervision of the market, including looking into a stock index "circuit breaker" system that would halt trading in response to substantial drops.

The China Securities Regulatory Commission (CSRC) said in a post on its official microblog late on Sunday that the country's markets were more stable and risks associated with high levels of leverage have eased following a period of high volatility.

China's stock markets have fallen around 40% since mid-June, spooking global markets and investors, and prompting a raft of counter measures from Beijing to stem the drop.

"The government won't normally intervene, but when there are severe, abnormal fluctuations in the markets, the government can't just sit on the sidelines and must take decisive and timely measures to stabilise the market," the statement said.

The CSRC added that state margin lender China Securities Finance Corp would continue to support market stability through various means.