(Yicai Global) Aug. 28 -- Chinese stock exchanges should never slack off in frontline regulation, and room for improvement remains, Liu Shiyu, chairman of the China Securities Regulatory Commission, said in a recent speech.

Exchanges are by no means just trading platforms, and they must also function as powerful regulators, the CSRC said on its official WeChat account, citing a speech Liu gave at an international conference on exchanges' role in frontline regulation.

"Frankly speaking, our exchanges did a poor job on frontline regulations in the past, and the wild fluctuations in the stock market in 2015 are a clear manifestation of this," he said.

The Shanghai and Shenzhen stock exchanges introduced models to supervise and regulate their members last year, said Liu. Members are required to obtain adequate information about their customers, effectively monitor their investment transactions and report irregular conduct upon discovery. The exchanges have significantly bolstered real-time transaction supervision in the past 12 months or so, and their efforts have proven effective in reining in illegal trading activities, he said.

Regulators will speed up the construction of a centralized supervision system, and keep an eye on irregular activities in cross-border, cross-exchange and cross-account transactions, so that violators have nowhere to hide, Liu said.

Exchanges have thoroughly probed listed companies' information disclosures and put pressure on members to improve compliance, conduct on-site checks and report findings to the CSRC.

Effective frontline regulation by exchanges has helped maintain capital market stability in the past couple of years, Liu said.

Domestic and foreign exchanges should work together to ensure effective stock market regulation, he said. The international conference on stock exchange frontline regulation should be institutionalized as an annual event and as a platform for exchanges to share ideas, he said.