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However, the CSRC remains sanguine.

"We know that an increasing number of QFII and renminbi-QFII are applying for quotas to enter the mainland capital market, which shows that they still have positive expectations," the CSRC spokesman said.

The director of the fund supervision department of the CSRC said on Friday that a new round of RQFII quota approvals will start soon, to satisfy the growing investment needs of foreign financial institutions.

The total RQFII quota has been expanded to 200 billion yuan ($32 billion).

Meanwhile, the securities watchdog also released a draft amendment of the regulatory policies for fund investments, in line with the upcoming new edition of the Securities Investment Fund Law, which will take effect on June 1.

The CSRC is expected to limit the leverage rate of fund investments and tighten the supervision on trading risks.