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China to Introduce Measures for Strengthening Regulation of Program Trading of Stocks
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Chinese
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Category：Legislative Updates
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Subject：Securities
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Keywords：stock exchanges; program trading; regulation
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Source：Pkulaw
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Publish Date：09-07-2023
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Recently, the Shanghai Stock Exchange, the Shenzhen Stock Exchange and the Beijing Stock Exchange jointly promulgated the Notice on Relevant Issues Concerning Program Trading Reports of Stocks and the Notice on Relevant Issues Concerning Strengthening the Management of Program Trading, under the guidance of the China Securities Regulatory Commission (CSRC).
The Notice on Program Trading Reports clarifies mainly the specific arrangements for the program trading reports of the stock market, including its subject, method, content and others, and sets additional requirements for high-frequency trading.
Meanwhile, the Notice on Strengthening the Management aims at strengthening the management of program trading and works in conjunction with the Notice on Program Trading Reports. These two notices constitute the fundamental institutions for the regulation of program trading. First of all, the responsibilities of securities companies for program trading are defined. The second notice stipulates that securities companies strengthen the management of program trading behaviors of both their own and their clients. Second, it stipulates that stock exchanges should strengthen monitoring and watch-out over important items including the abnormal trading behaviors which may affect the trading price and turnover, or the system security of the stock exchanges. Third, the stock exchanges, as provided for by the Notice on Strengthening the Management, may have differentiated management requirements for high-frequency trading, including an adjustment of criteria for determining abnormal trading and an increase of reporting items.
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