The order from China's securities watchdog was delivered to major asset managers and the proprietary trading desks of brokerages, the report added, citing people familiar with the matter.
The measures come as the China Securities Regulatory Commission (CSRC), led by the watchdog's newly-installed chairman Wu Qing, ramps up efforts to stabilise an ailing market.
The CSI 300 index has risen for seven consecutive sessions straddling the Lunar New year holiday period and is up 12% from five-year lows it hit early this month, amid hopes of more forceful measures to revive the market.
Firms affected by the ban are unable to sell more shares than they buy during the first and last 30 minutes of trading, according to the Bloomberg report.
In addition, some brokerages have been asked to recall stock loans to clients for shorting purposes, and authorities have asked hedge funds not to place concentrated sell orders, Bloomberg said.
There aren't many precedents in global markets of regulators clamping down on closing trades.
South Korea imposed a ban on short-selling of stocks late last year. China has in the past, during periods of heavy downward pressure on the yuan, discouraged market participants from having big net short yuan positions at the end of a trading day.
(Reporting by Mrinmay Dey in Bengaluru; Editing by Jan Harvey and Mark Potter)
