Stock Exchanges Pledge Equal Treatment for Chinese, Foreign High-Frequency Traders
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The Shanghai and Shenzhen stock exchanges reassured foreign institutions who engage in high-frequency trading that they will be subject to the same fee collection standards as domestic traders amid speculation they will have to pay more under a new charging system.
High-frequency trading will face additional fees, according to draft rules released by the two bourses and the Beijing Stock Exchange in June aimed at strengthening oversight of program trading, where investors use computer programs to make trading decisions and execute transactions. The rules align with provisions in the China Securities Regulatory Commission’s (CSRC) program trading regulations released in May that will take effect on Oct. 8.
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- Shanghai and Shenzhen stock exchanges assured foreign institutions that fee standards for high-frequency trading will be consistent with those for domestic traders, despite new regulations.
- Draft rules released add fees for high-frequency trading and address program trading oversight, effective from Oct. 8, aligning with CSRC regulations.
- High-frequency trading accounts have decreased by over 20% this year, indicating increasing regulatory scrutiny and impact on market activities.
- Shanghai Stock Exchange
- The Shanghai Stock Exchange reassured foreign high-frequency traders that they will be subject to the same fee standards as domestic traders under new rules aimed at strengthening oversight of program trading. The exchange's draft rules, released in June, base fees on the number of orders submitted or canceled. China's regulators have increased scrutiny of high-frequency trading due to concerns about market volatility.
- Shenzhen Stock Exchange
- The Shenzhen Stock Exchange reassured foreign high-frequency traders that they will be subject to the same fee standards as domestic traders under new rules. These fees are based on metrics like the number of orders submitted or canceled. The exchange emphasized fairness between domestic and foreign institutions and stated that fee mechanisms would consider market feedback.
- Beijing Stock Exchange
- The Beijing Stock Exchange, along with the Shanghai and Shenzhen stock exchanges, released draft rules in June to strengthen oversight of program trading, particularly high-frequency trading. These rules are aligned with the China Securities Regulatory Commission’s program trading regulations, which take effect on October 8. The draft stipulates additional fees for high-frequency trading based on metrics like the number of orders submitted or canceled.
- February 2024：
- A well-known domestic quant fund manager was blamed for stoking sudden drops in the Shanghai and Shenzhen exchanges’ benchmark indexes.
- April 2024：
- CSRC official Zhang Wangjun stated that quant traders’ stock holdings made up about 5% of the total value of shares circulating in China’s A-share market, but they accounted for about 29% of the total trading value.
- May 2024：
- CSRC released program trading regulations that will take effect on Oct. 8, 2024.
- June 2024：
- The Shanghai and Shenzhen stock exchanges and the Beijing Stock Exchange released draft rules aimed at strengthening oversight of high-frequency trading.
- June 2024：
- The CSRC stated that as of the end of June 2024, the number of high-frequency trading accounts had dropped more than 20% this year to just over 1,600.
- July 10, 2024：
- The CSRC provided updated statistics on the number of high-frequency trading accounts.
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