Photo taken on Aug. 24, 2020 shows the Shenzhen Stock Exchange in Shenzhen, south China's Guangdong Province. (Xinhua/Mao Siqian)
BEIJING, Feb. 21 (Xinhua) -- Shanghai and Shenzhen stock exchanges announced on Tuesday smooth implementation of their quantitative trading reporting systems since late 2023, reported Xinhua-run China Securities Journal on Wednesday.
To date, existing investors involving quantitative trading on the two exchanges have fulfilled due reporting work and new investors engaged in quantitative trading abode by the rules requiring "reporting ahead of transaction" with gratifying quality of related reports in general.
The two bourses will continue to enhance monitoring and analysis of quantitative trading, in particular high frequency trading (HFT), to appraise and optimize their quantitative trading reporting systems.
Generally, quantitative trading can help improve market liquidity and price discovery, but is usually regulated and supervised under rules stricter than those for other types of trading in foreign financial markets in a bid to fend off negative impacts to market order.
As investors engaged in quantitative trading, in particular the HFT, boast explicit advantages in trading technology, information and speed as compared with small investors, it may be easy to escalate market volatility in certain circumstances in view of the strategy convergence and the large quantity of transactions for the same end.
For next step, Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) will further enrich regulatory arrangements for quantitative trading, including specifying the "reporting ahead of trading" access arrangements, improving differentiated charging mechanisms, reinforcing supervision over abnormal transactions and abnormal reporting and cancellation of transaction orders, enhancing monitoring and regulation of leverage products for quantitative trading, and strengthening supervision over private equity funds engaged in quantitative trading. The two exchanges will also strengthen communication with the stock exchange of Hong Kong to include northbound investors in those required to report their quantitative trading.
Previously on September 1, 2023, SSE and SZSE released circulars on program trading reporting of stocks and circulars to strengthen related trading management. Since October 9 in last year, these circulars have come into force at the same time. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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