Authorities should not permit trade in financial products that may be fraudulent because there is no existing law to deal with complaints, said Guan Xiaofeng, a professor at China University of Political Science and Law.
Hong Kong stocks closed 277.03 points lower, or 1.36 percent, at 20,145.43 on Friday.
The ChiNext stock market was up Friday as 46 of the 79 stocks at China's start-up board for small and medium-sized enterprises were up.
China's stock index futures closed lower Friday with the contract for May, the most actively traded, down 1.38 percent to end at 2,862.6 points from the previous trading day.
Chinese shares closed lower Friday after rebounding more than 2 percent on the previous trading day, as financial and property shares remained weak.
Transaction of China's margin trading and short selling totaled 624 million yuan ($91.40 million) as of May 12, the Shanghai Securities News reported Friday.
Hong Kong stocks closed 209.97 points higher, or 1.04 percent, at 20,422.46 Thursday.
The ChiNext Index was up Thursday as only six of the 79 stocks at China's start-up board for small and medium-sized enterprises were down.
China's stock index futures closed up Thursday with the contract for May, the most actively traded, up 2.31 percent to end at 2,894.6 points from the previous trading day.
Chinese shares rose Thursday with almost all stocks up. The benchmark Shanghai Composite Index gained 2.06 percent to close at 2,710.51 points. The Shenzhen Component Index expanded 2.67 percent to 10,417.81 points.
Rubber dropped to a five-month low in a volatile trade on concern that accelerating inflation may spur China to take additional steps to curb growth.
Most Chinese stocks fell, led by consumer companies and commodity producers, on concern the government will increase borrowing costs to curb accelerating inflation and rising property prices.