The China Securities Regulatory Commission (CSRC) said it visited the premise of Hundsun Technologies Inc. on Monday over public concerns that its financing service may be unlawful.
The Hangzhou-based financial software company provides its HOMS system to assist over-the-counter share financing, a kind of leverage that can magnify both gains and losses.
In a very brief statement, the CSRC said the investigation was "looking for clues", without any elaboration.
Hundsun said HOMS is just a "technical tool" for private funds, and called suggestions that the system triggered chaos in China's stock market over the past weeks "very much biased and unprofessional."
