China Enacts Rules to Tighten Scrutiny of Programmed Trading
- Rules followed draft in April, set to take effect in October
- High-frequency trading comes under stricter monitoring
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China’s securities regulator published new rules to tighten scrutiny on programmed trading, paving the way for stricter supervision of institutional investors including the 1.6 trillion yuan ($222 billion) quantitative hedge fund industry.
Investors that use computer programs to generate automated trades should report to exchanges before starting such transactions, and their trading will be subject to real-time monitoring, the China Securities Regulatory Commission said Wednesday on its website. The new rules, set to take effect Oct. 8, also list requirements on risk control and technology systems, and allow tighter scrutiny of high-frequency trading.