Caixin
Sep 08, 2015 02:31 PM

Regulators Seek Formula for Handling Algorithmic Trading

(Beijing) – Placing multiple orders within seconds through computer programs is a new trading strategy being adopted by an increasing number of institutional investors, and one that regulators are taking a closer look at over worries this so-called algorithmic trading is disrupting the country's stumbling stock market.

On August 3, the Shanghai and Shenzhen stock exchanges said they have identified and punished at least 42 trading accounts that were suspected of involvement in algorithmic trading in a way that distorted the market. Twenty-eight were ordered to suspend trading for three months, including accounts owned by the U.S. hedge fund Citadel Securities, a Beijing hedge fund called YRD Investment Co. and Ningbo Lingjun Investment LLP.

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