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fintech / news / / South China Morning Post

Chinese authorities plan to enhance regulation of programme trading to clamp down on market misconduct.

The CSRC plans to enhance regulation specifically targeting programme trading in China's securities market.

KEY POINTS
Chinese authorities plan to enhance regulation of programme trading to clamp down on market misconduct, the head of the China Securities Regulatory Commission (CSRC) said on Saturday. Hedge funds and institutional investors are increasingly managing their portfolios in China via programme trading, which involves using algorithms to automatically execute a large volume of securities orders based on predetermined conditions. “Programme trading has become an important trading method in our country and also in other global markets. Besides private equity funds, mutual funds and other institutional investors, some individual investors also conduct a certain amount of programme trading,” said Wu Qing, chairman of the CSRC, at the fourth annual meeting of the Asset Management Association of China in Beijing. “Facing such a trend, we have to explore in-depth how to enhance regulation of programme trading to create a fair and well-regulated market,” he said. “We have to prevent someone from abusing the technology to conduct any malpractice, as we are determined to crack down on market manipulation and other behaviour that might disrupt market order.” But the CSRC head said there was still room for improvement, noting that stock funds accounted for only about 30 per cent of the country’s mutual funds, well below the level seen in other mature financial markets.
COMPANIES
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