Right after campaigning against “malicious short-sellers,” the China Securities Regulatory Commission (CSRC) is now looking into automated trading’s impact on the stock market, according to Reuters.
The main driver here seems to be worries that automated trading firms, using their fancy algorithms, might be able to undo Beijing’s efforts to “reinforce the ‘national team’ of brokerages and banks that have pledged to buy and hold shares until markets recover.”
While undoubtedly serious, one Chinese quant shop seems totally unperturbed by this, telling Reuters:
Wang Feng, CEO of Alpha Squared Capital, a Chinese hedge fund that uses such strategies, said his business is unlikely to be affected.
“The CSRC is only targeting those who use program trading to frequently submit and then cancel bids, thus disturbing the market and manipulating prices,” he said.
“Such a practice is closely watched by regulators in the U.S. as well.”
In addition to the probe, the CSRC has also shut down 24 trading accounts for suspected irregularities, which apparently includes spoofing.
Watch out Navinder!
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