E-commerce giant Alibaba's latest move to introduce an online investment platform may be blocked, after China's securities watchdog said on Friday it had contravened certain fund management regulations.

A spokesman for the China Securities Regulatory Commission said Yu'ebao - a new business operation under Alipay, Alibaba's third-party online payment platform - did not register its settlement accounts for fund sales with the authorities.

It did not submit an agreement showing it is under the supervision of a certain bank either, said the CSRC, which has now urged Alipay to rectify the situation, warning it could be punished if it fails to do so within a timescale.