China's foreign exchange regulator said it would ramp up compliance efforts to avoid fraudulent use of local collateral to obtain foreign loans, but denied reports that it was investigating specific Chinese firms, the Financial Times reported.

SAFE stressed that it backs the use of domestic assets as collateral for foreign loans, a practice known as neibao waidai, so long as this is done in a way that complies with regulations.

The regulator said it would "guide financial institutions to step up compliance management and risk control of neibao waidai and to severely crack down on fake or malicious collateral" as part of Beijing's efforts to curb risks from Chinese companies' overseas buying sprees, the FT said.

China has required additional regulatory approvals for companies' offshore acquisitions following a record year for M&As in 2016.

Meanwhile, SAFE denied reports that it was scrutinizing how some of China's biggest dealmakers collateralize their domestic assets.

SAFE "recently began reviewing loan guarantees for Anbang Insurance Group Co., Dalian Wanda Group Co., Fosun International Ltd., HNA Group Co. and the Chinese owner of the AC Milan soccer team," Bloomberg News reported Aug. 1, citing people familiar with the matter.

SAFE was said to be looking for potential irregularities in the so-called "overseas loan under domestic guarantee."

The regulator, however, stressed that it was not targeting any companies, the FT said.