SHANGHAI, Aug 14 (Reuters) - China"s securities regulators punished 19 institutional investors as authorities tighten scrutiny over price-setting behaviours under a more liberalised listing system. China launched the tech-focused STAR Market in Shanghai in mid-2019, along with the introduction of a U.S.-style, registration-based initial public offering (IPO) system in that market. The Securities Association of China (SAC) said late on Friday that a joint probe recently with the Shanghai Stock Exchange over STAR IPOs had exposed issues with 19 institutional investors. The problems included weak internal controls, inadequate rationale for price-settings, non-compliance with stipulated procedures and improper storage of working papers, the SAC said in a statement, without identifying the companies. One insurer has been temporarily banned from participating in the institutional portion of IPO subscriptions, while eight fund houses and one asset manager have been barred from the share placement market for a month, according to the statement. SAC said regulators will strengthen supervision and step up penalties against misbehaviour to maintain order for IPO price-setting and protect investors. China has already replicated the registration-based IPO system to Shenzhen"s start-up board ChiNext, and aims to gradually roll out the mechanism to the rest of China"s stock market, which still uses a system based on regulators" approvals.