Despite good news from the securities regulator, the Chinese mainland stock markets closed mixed on Monday.

The benchmark Shanghai Composite Index rose 0.7 percent to close at 3,117, while the Shenzhen Component Index dropped nearly 2 percent, to end the day at 11,094.

Teng Tai is with The Research Center of Galaxy Securities.

"It can be seen as the beginning of the central government's effort to intervene in the stock markets. The intervention is necessary, and it is a common practice in other countries. But the policy was not warmly welcomed by the market. The healthy development of the Chinese stock markets rely on not only the large and small investors' confidence in the Chinese market, but also the follow up policies issued by the government."

The expert said Monday's market reaction showed that the investors were not confident enough on the future of the stock markets.

Moving to stabilize the markets, the China Securities Regulatory Commission announced late Sunday that shareholders who want to sell large numbers of shares newly freed from the lock-up periods must do so through the "block trading system."

That requires such sales to be made through private negotiations between buyers and sellers of the large chunks of shares.