stock market Photo:VCG

 

China Securities Regulatory Commission (CSRC), China's top securities regulator, has issued  trial regulation on quantitative trading in the stock market on Wednesday, as part of ongoing efforts to strengthen supervision on market trading and support the long-term healthy and sound development of China's capital market. 

The new rule, which will put in place "comprehensive and systematic regulation" on quantitative trading, will take effect on October 8, 2024.

The new rule makes clear definition on quantitative trading and its overall requirement. It specially noted that relevant activities involving quantitative trading should abide by the principle of fairness and must not affect the security of the stock exchange system or its normal trading orders. Investors of quantitative trading should report on information involving account, financial, trade, and software, and carry out the requirement of "reporting before trading," and could only engage in quantitative trading after fulfilling their reporting obligation. 

Under the new rule, Chinese stock exchanges also need to carry out real-time monitoring on quantitative trading and focus specially on supervision on abnormal trading behaviors. The securities companies should also reinforce the management responsibility on clients and ensure that institutional investors qualify for requirement on the risk-control and compliance. 

Other provisions also include strengthening the management on information system, supervision on high-frequency trading, as well as supervisory and management arrangements. 

CRSC on Friday also published its enforcement priorities in 2024, vowing that the commission will deepen the implementation of nine-point guideline action plan on the high-quality development of China's capital market issued in April, and accelerate the construction of a safe, standardized, transparent, open, vibrant, and resilient capital market.

Wu Qing, chairman of CSRC also pledged on Wednesday that the top securities regulator will further improve the quality of listed firms, while also encouraging companies with innovation and development potential to grow better and stronger through optimizing the arrangement for issuance, listing, mergers and acquisitions, and stock ownership incentives.

"We will further crackdown on securities violations and criminal actions, and will speed up the development of a comprehensive prevention and anti-fraud system for the capital market, further enhance the efficiency of related administrative and criminal actions, and make offenders pay a heavy price to effectively maintain the order of fairness, justice, and openness in the market" Wu said. The comment was made at a speech he delivered on Wednesday, which also marked national investor's protection publicity day.

As the effects of strengthened supervision bear fruit, Chinese observers expect that China's stock market will develop in a stabilized track across the year, with investor's sentiment further warming up. 

The Shanghai Composite Index closed at 3,119.90 points on Wednesday, slightly down 0.82 percent from Tuesday. The benchmark index once surged 3,163.14 points to last week, representing an over 20-percent jump from the low point of 2,635.09 on February 5, which means the stocks in the Shanghai bourse are "entering a technical bull market." 

Global Times