Jun 11, 2024 06:56 PM

China’s Stock Exchanges to Tighten Controls on High-Frequency Trading

00:00

00:00/00:00

Listen to this article 1x

The exchanges vowed to strictly regulate high-frequency trading, including taking strong disciplinary action against high-frequency traders who engage in “abnormal trading activities.” Photo: VCG

China’s stock exchanges plan to impose stricter rules and extra fees on high-frequency trading — one type of controversial trading that has been blamed for fueling market turmoil this year.

The stock exchanges in Shanghai, Shenzhen and Beijing each released draft rules on Friday for program trading — which includes quantitative trading, whereby investors employ mathematical models and algorithms to make trading decisions and execute transactions. The rules, which are similar on the three bourses, are open for public comment through Friday.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

China's stock exchanges are planning stricter regulations and extra fees on high-frequency trading, addressing concerns over its role in market volatility.
The proposed rules define high-frequency trading and allow exchanges to strictly monitor and penalize "abnormal trading activities."
Exchanges can impose transaction restrictions, suspend trading, and temporarily close markets if program trading causes significant disruptions.

AI generated, for reference only

Who’s Who

Ningbo Lingjun Investment Management Partnership: Ningbo Lingjun Investment Management Partnership faced a three-day trading ban from the Shanghai and Shenzhen stock exchanges in February for allegedly causing a rapid decline in benchmark indexes by selling nearly 2.6 billion yuan ($366 million) of shares in less than a minute. This incident led to pledges for stricter supervision of quant trading by the exchanges.

AI generated, for reference only

What Happened When

February 2024：: The Shanghai and Shenzhen stock exchanges pledged to strengthen supervision of quant trading after imposing a three-day trading ban on Ningbo Lingjun Investment Management Partnership.

2024-06-07：: The stock exchanges in Shanghai, Shenzhen, and Beijing released draft rules for program trading and opened them for public comment through 2024-06-14.