China has set up a top-level task force to clamp down on illegal activities in the securities market, a government report said on Sunday.

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China's cabinet, the State Council, approved the body, to include the vice chairman of the China Securities Regulatory Commission (CSRC), the industry's watchdog, the deputy central bank governor and the deputy head of the Supreme Court, according to the report on the central government's Web site (www.gov.cn).

The committee will formulate and interpret rules to crack down on illicit activities in the industry and help related agencies pursue suspected crimes, the report said.

A stock craze is sweeping the country and millions of small investors have poured into the stock market in the hope of making quick returns.

In December the Cabinet said that it had found many unlisted firms had made public share issues without approval. They had promised to list the shares eventually at home or overseas, state media reported.

Many illegal brokerages were found to be selling and dealing in shares issued by unlisted companies.