The main Chinese regulator has outlined a raft of restrictions on algo traders
The main Chinese financial regulator has
proposed a series of tough restrictions on electronic trading
within China in response to the recent volatility in that
The China Securities Regulatory Commission
published on Friday a Consultation Paper for the Administrative
Measures on Program Trading of the Securities and Futures
Markets which proposes a range of tough measure on the use of
electronic trading in China.
The CSRC said that under the proposals:
"Program trading shall be "highly supervised, restricted for
development, divided to avoid disadvantages while seeking
advantages, and continuously regulated"."
The regulator argued that electronic
trading brings liquidity to markets but it also increases
volatility and the risk of market abuse.
It wrote: "CSRC summarized three main
characteristics of the Chinese capital markets: the market's
liquidity is good enough for "serving the real economy";
individual investors are still major participants in the
market, so aggressively promoting program trading may not be
good for maintaining a fair market environment; and
over-speculation and hype are still serious concerns in the
This article is available exclusively to subscribers
Please log in to continue reading.
Not yet a subscriber?
Click here to take a free trial.
Already have an account? |
Please fill in your details below and a customer service representative will contact you.