Private investment firms in China are facing tighter regulation as the country's securities market regulator steps up its crackdown on illegal activities.

According to the China Securities Regulatory Commission, 25,607 private investment firms registered with it as of Jan. 15 manage assets worth 5.1 trillion yuan ($760 billion).

Typically, private investment firms in China are private equity firms, venture capital companies and hedge funds that invest in stocks and bonds in the secondary capital markets.