China will further expand market access of foreign funds into the nation's securities industry and encourage Chinese cross-border businesses, Yao Gang, vice-chairman of China's securities regulator, said on Friday.

"By good institutional arrangements, the Chinese securities industry will be comprehensive, comprised of State-owned, private and foreign companies," Yao told a forum in Beijing.

Yao said private capital can set up securities firms and market access to foreign funds will grow. State-owned securities companies are encouraged to enter into mixed ownership reform and social security funds. Enterprise annuity managers will be supported in setting up securities firms.

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Chinese securities firms are encouraged to help domestic companies get listed abroad, enter into mergers and acquisitions and issue bonds there, said Yao.

"We support securities companies that go abroad to set up subsidiaries and those meeting requirements to help foreign enterprises to issue yuan-denominated bonds at home," said Yao.

Yao said companies can join the China (Shanghai) Pilot Free Trade Zone and the pilot program. That will allow cross-border stock investment by investors in the Chinese mainland and Hong Kong.

The China Securities Regulatory Commission released a statement on Thursday about the development of Chinese securities firms.

Wang Dongming, chairman of Citic Securities Co Ltd, told the forum that with the State Council's statement on the capital market, Chinese securities companies can enhance their leverage ratio and develop in the private capital market.

The State Council, China's cabinet, released a wide-ranging statement of policy principles this month aimed at promoting the healthy development of China's capital market.

"Chinese securities firms should increase their leverage ratio and they should be allowed to issue income receipts, do inter-bank lending, repurchase and bond issuance in the interbank market," said Wang.

Wang also said that China should develop its private capital market and securities firms should be allowed to set up privately, offering products themselves.

Chinese securities companies can develop businesses in the private capital market as a way of innovation, Wu Xiao-ling, deputy chairwoman of the financial and economic committee of the National People's Congress, said on Friday.

Wu said private capital directly offers enterprise services and gives a way to find professional investors. She said regulations should be different for China, so it can establish a multi-level capital market.

"Regulation on the issuance, transferring and trading of securities in the public and private markets should be different," Wu said.

She said groups of investors ought to be divided by experience and risk resistance and that professionals can have fewer limits in investing.