BEIJING, July 1 -- China Financial Futures Exchange (CFFEX) on Wednesday denied a rumor that overseas investors have been shorting A-shares via stock futures, causing the recent stock market plunge.

China's key Shanghai stock index has declined more than 20 percent from a peak of 5,178.19 points on June 12.

Rumors have circulated on the Internet blaming the collapse on short-selling by overseas investors, including Goldman Sachs and CSOP Asset Management, a Hong Kong unit of China Southern Asset Management.

The CFFEX said there are now 63 overseas institutions who can trade China's stock index futures through the Qualified Foreign Institutional Investor (QFII) and Renminbi QFII programs, but they can only trade for risk-hedging purposes.

China Southern Fund has not opened an account at the exchange, the CFFEX said in its official account on Sina Weibo, China's popular microblogging service.

"The institutions' hedging complies with regulations and there is no massive short-selling," it said.

The exchange asked the securities regulator to punish those who spread rumors that disrupt market order.

China Securities Regulatory Commission did not respond to the rumor but reposted the CFFEX post on its official Sina Weibo account.

Goldman Sachs declined to comment on the rumor, while the CSOP called the rumor as "groundless" and said it reserves the right to file a formal lawsuit against those who spread the rumor.