The fine exceeded the 523 million yuan CSRC slapped on Everbright Securities in 2013 for insider trading.
Market observers have welcomed the clampdown, pointing out that the A-share market has been plagued by insider trading, financial fraud and market manipulation.
"One consequence of the market turmoil followed by government intervention has been the withdrawal of investors' interest," Tim Condon, chief Asia economist at the ING Bank, a multinational banking and financial services corporation-based in the Netherlands, said.
The regulator's determination to clean up the equities market has proved that a stable and healthy investment environment is crucial for Chinese companies as they search for new funding.
Already the government has rolled out major initiatives in shareholding reform for State-owned enterprises.
But then the decision to come down hard on illegal activities has indicated that Beijing is more than willing to portray the CSRC as a tough regulator, according to market observers.
To many, this is an image makeover and now gives the CSRC a new set of teeth.
Before, the regulator was seen as just having the final approval on extending business licenses and giving the green light to companies looking to sell equities.
The emphasis appeared to be on the financial performances of companies as opposed to regulatory oversight.
"There is now an urgent task to restore the regulator's role as a watchdog by enhancing its ability to clampdown on illegal market activities," Dong Dengxin, a financial researcher at Wuhan University of Science and Technology, which is in the capital city of Hubei province, said.
As the crackdown continues, the CSRC has come under increased scrutiny.
Zhang Yujun, the regulator's assistant chairman and the senior executive, was in charge of rescue planning during the stock market turmoil.
He is now being investigated for "serious violations of laws and disciplines" by the country's top anti-corruption watchdog, the Central Commission for Discipline Inspection of the Communist Party of China.
The CSRC has declined to comment about the case, even though Zhang is by far the highest-ranking securities official to be investigated by the government.
Analysts have also pointed out that this has showed that Beijing is determined to root out problems and maintain financial stability by pushing ahead with major reforms of the capital market.
"Maintaining the stability of the country's financial markets has been one of the top priorities for the leadership," Su Kepei, a researcher at the University of International Business and Economics in Beijing, wrote in a research paper.
"China is pushing a series of financial reforms. If there is problem with financial stability, it will affect and disrupt the process of these reforms and the opening-up of its financial markets."
But there are still hurdles to overcome. Many market observes have raised concerns about whether the CSRC is equipped to deal with new trading tools and financial derivatives.
Last week, the regulator issued guidelines for automated stock trading that can create volatility in the market.
The rapid rise of information technology has proved a challenge for the CSRC. Advanced trading software has enabled securities brokerages to operate illegal services in a regulatory void.
Again, this has started to be addressed. The CSRC fined Hundsun Technologies Inc, backed by e-commerce giant Alibaba Group Holding Ltd, and two other financial software companies, a combined 398.6 million yuan.
This was for allowing trading systems to be used which enabled investors to buy and sell in stocks under false names and evade regulation.
"It is both a challenge and a task for the regulator to improve the sophistication of its regulation and to keep pace with the evolving market," Li Daxiao, chief economist at Yingda Securities Co Ltd, said.
