Investors look at computer screens showing stock information at a brokerage in Shanghai, August 13, 2015.[Photo/Agencies]

The Chinese authorities are pressing ahead with their unprecedented crackdown on illegal activities in the domestic stock market.

It was reported that the Ministry of Public Security recently arrested two executives from a Hong Kong-owned fund for irregular futures trades and it was investigating Xu Xiang, general manager of Shanghai-based company Zexi Investment, for suspected insider trading.

The former case marks the first public arrest linked to a non-mainland fund and the latter involves a top private equity investor who reportedly managed funds of tens of billions of yuan.

Illegal activities such as insider trading, financial fraud and manipulation have long plagued the domestic stock market and exacerbated the volatility of trading during the recent crisis.

If the ongoing clampdown against such illegal activities can eventually help establish a transparent and fair market order, it will be a silver lining to the cloud hanging over the stock market since the benchmark Shanghai Composite Index plummeted by more than 30 percent from a seven-year high of 5,178.19 points in early June.

Thanks to strenuous government efforts to stabilize the market, Chinese shares have managed to level well above 3,000 points, but that does not make it any less urgent for Chinese regulators to root out the market cheats.

These latest cases show that Chinese authorities are continuing to expand the scope and depth of their investigation against all the illegal activities that have seriously infringed the interests of smaller investors and compromised the principle of fair play.

Last month, the China Securities Regulatory Commission fined 10 individuals involved in five cases of wrongdoing a combined 100 million yuan ($15.8 million). Two of the investors were banned from the securities market for life. And China's largest securities firm, CITIC Securities Co, is being investigated for alleged insider trading.

It is good to know that the regulators have imposed fines worth at least 2.37 billion yuan this year, five times more than the whole of 2014. These are much-needed steps to restore investors' confidence in the battered domestic stock market.

Nevertheless, it remains a response far from proportionate to the scale of the problem. To develop a properly functioning stock market that can power real economic growth and instill confidence in its fairness among all investors, Chinese policymakers should keep cracking down on all wrongdoers with heavier and targeted punches.