Chinese regulators continue their crackdown on high-frequency trading in efforts to stabilize equity markets, recently taking disciplinary action against another firm.
The China Financial Futures Exchange announced that Shanghai Weiwan Fund Management utilized high-frequency trading in stock futures to bypass trading limits, resulting in profits of 8.9 million yuan ($1.2 million).
Consequently, the profits were confiscated, and Shanghai Weiwan received a one-year trading ban. The exchange also cited the firm’s failure to adhere to regulations regarding the disclosure of relationships among accounts owned by controllers and their relatives.
Shanghai Weiwan has not provided immediate comment on the matter.
In a separate development, the China Securities Regulatory Commission revealed plans to collaborate with stock exchanges and the China Financial Futures Exchange to enhance oversight of trading behavior, particularly high-frequency trades.
Last week, China’s major stock exchanges suspended a significant quantitative fund from trading in Shenzhen and Shanghai after the fund, managing over $8.34 billion, sold $357.4 million worth of shares in Shenzhen, deemed “abnormal trading behavior” by regulators.
These regulatory actions coincide with China’s broader efforts to bolster investor sentiment and rejuvenate sluggish stock markets. Measures include tightening oversight of direct market access—a strategy common in quantitative trading—and suspending restricted share lending to curb short selling.
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