On May 15, the CSRC formulated and issued the provisions on the Management of programmed Trading in the Securities Market (for trial implementation) (hereinafter referred to as the "Administrative regulations"), making it clear that the stock exchange shall carry out real-time monitoring of programmed trading and focus on monitoring abnormal trading behavior. and strengthen the supervision of high-frequency trading.
The CSRC pointed out that in order to implement the provisions of the Securities Law on the supervision of procedural transactions in the securities market, to implement the "opinions of the State Council on strengthening supervision and preventing risks and promoting the high-quality development of the capital market", and to promote the development of procedural trading norms, to maintain securities trading order and market fairness, the CSRC formulated and promulgated the Management regulations, which have been formally implemented since October 8, 2024.
The "Management regulations" closely revolve around the main line of strong supervision, risk prevention, and promoting high-quality development, and adhere to the general idea of "seeking advantages and avoiding disadvantages, highlighting fairness, effective supervision, and standardized development". To make omni-directional and systematic regulations on the supervision of procedural transactions in the securities market (the market is often called quantitative trading) is an important measure to strengthen the supervision of market transactions.
The first is to clarify the definition and overall requirements of procedural transactions. Programmed trading refers to the act of automatically generating or issuing trading orders to conduct securities trading on the stock exchange through computer programs. The relevant activities should follow the principle of fairness and shall not affect the security of the stock exchange system or disrupt the normal trading order.
The second is to clarify the reporting requirements. Programmed trading investors shall report account basic information, capital information, trading information, software information and other information in accordance with the regulations, and implement the requirements of "reporting first, trading later", and can carry out procedural trading only after fulfilling the reporting obligation.
Third, make clear the requirements of transaction monitoring and risk prevention and control. The stock exchange carries out real-time monitoring of programmed trading and focuses on monitoring abnormal trading behavior. At the same time, we should further consolidate the customer management responsibilities of securities companies and clarify the compliance risk control requirements of institutional investors.
The fourth is to strengthen the management of information systems and clarify the regulatory requirements related to procedural transactions, such as technical systems, transaction units, host hosting, access to transaction information systems, and so on.
Fifth, strengthen the supervision of high-frequency trading. Clarify the definition of high-frequency trading, and put forward differential regulatory requirements from the aspects of reporting information, charging, transaction monitoring and so on.
Sixth, clear supervision and management arrangements. If the relevant institutions and individuals of procedural transactions violate the relevant provisions, the stock exchanges and trade associations shall take regulatory measures in accordance with the provisions, and the CSRC and its dispatched offices may take regulatory measures or impose penalties in accordance with the law.
Seventh, it is clear that northward procedural transactions should be incorporated into report management and implement transaction monitoring standards in accordance with the principle of consistency between domestic and foreign capital.PokemoncryptogameHis administrative matters shall be subject to the application of these provisions, and the specific measures shall be formulated by the Shanghai and Shenzhen Stock Exchange and promulgated separately.
The CSRC said that in the early days, the CSRC openly solicited opinions from the public on the "management regulations," and listened to the opinions and suggestions of investors and market institutions at home and abroad through discussions, research, and other means. All parties generally support and agree, and the evaluation is positive. Some of the opinions and suggestions put forward are related to the understanding of the provisions, and the CSRC has communicated and explained to the relevant investors and market institutions; most of them are related to the detailed implementation arrangements of the Management regulations. The CSRC will guide stock exchanges, securities industry associations, fund industry associations, etc., to fully learn from the mature experience of overseas markets when formulating and improving implementation rules and relevant business rules, listen to the opinions and suggestions of all parties, and study them as soon as possible.