BEIJING - China's securities regulator on Saturday said it would restrict securities lending businesses and tighten scrutiny on improper regulatory arbitrage.

The statement from the China Securities Regulatory Commission announced that steps will be taken to strengthen management of securities lending and re-lending businesses, including higher margin requirements, and restricting lending of shares by strategic investors and senior management in newly listed companies.

The rules come amid growing public outcries against short-selling activities amid a lagging stock market. There have also been calls to restrict securities lending by strategic shareholders in newly-listed companies.

Senior management and key employees of Shandong Golden Empire Precision Machinery Technology Co lent their holdings to other investors for sale on the company's debut in Shanghai, triggering public discontent and a regulatory probe into the activities.

(Reporting by Joe Cash and Sam Shen; Editing by Lincoln Feast)