Around procedural transactionsJazzyspinscasinoThe new regulatory rules are here!

In order to strengthen the supervision of procedural trading in the securities market, promote the development of procedural trading norms, and maintain securities trading order and market fairness, on April 12, the China Securities Regulatory Commission issued the provisions on the Administration of procedural transactions in the Securities Market (trial) (draft for soliciting opinions) (hereinafter referred to as the Administrative provisions) to solicit opinions from the public.

The procedural trading supervision has been written into the new "National Nine articles", which shows that the senior management attaches great importance to related issues. A number of quantitative private equity firms told Chinese reporters that the new rules are aimed at high-frequency trading and fraud, which is bound to promote the further regulation of the domestic quantitative industry.

There is a lot of information about the new rules.

There are 32 articles in 7 chapters and there is a huge amount of information in the Management regulations. The first is to clarify the definition and overall requirements of procedural trading, the second is to clarify the reporting requirements, the third is to clarify the requirements for transaction monitoring and risk prevention and control, the fourth is to strengthen the management of information systems, the fifth is to strengthen the supervision and management of high-frequency trading, and the sixth is to clarify supervision and management arrangements. seventh, it is clear that northward procedural trading shall be included in reporting management and implement transaction monitoring standards in accordance with the principle of consistency between domestic and foreign capital, and other management matters shall be subject to these provisions.

In terms of transaction monitoring and risk management, the Management regulations point out that the stock exchange carries out real-time monitoring and monitoring of programmed transactions, focusing on the monitoring of abnormal trading behaviors that may affect the security of the stock exchange system or the trading order, including the number of declarations and withdrawals within a short period of time, frequency reaching a certain standard, and so on. The securities company shall sign an entrustment agreement with the client, strengthen the monitoring of the customer's programmed trading behavior, and cooperate with the stock exchange to take relevant measures.

In terms of information system management, the Management regulations require that securities companies should uniformly manage the trading units in accordance with the regulations, provide relevant services to all kinds of investors in accordance with the principles of fairness and reasonableness, and shall not provide special facilities for investors in procedural transactions. Where a stock exchange provides mainframe trading escrow services, it shall follow the principles of safety, fairness and reasonableness, distribute resources fairly, and strengthen the management of the subjects who use the mainframe escrow services. Securities companies shall, in accordance with the provisions of the stock exchange, make rational use of mainframe trading escrow resources to ensure the fairness of transactions between different customers.

It is worth noting that the Management regulations also require that for customers who frequently have abnormal transactions, major technical failures in programmed trading systems, or violate the relevant regulations of the stock exchange, securities companies shall not provide host escrow services to them. For procedural transactions where the number and frequency of declaration and withdrawal of orders reach a certain standard, the stock exchange may raise the charging standards, and the specific standards shall be separately prescribed by the stock exchange.

Chapter V of the Management provisions is a special provision for high-frequency trading. In addition to the identification standards for high-frequency trading, it is also clear that stock exchanges can implement differential charges for high-frequency trading, appropriately raise transaction charges, and charge other fees such as cancellation fees. The specific standards and methods shall be prescribed separately by the stock exchange.

After the release of the "Management regulations," the Shanghai and Shenzhen exchanges issued a document saying that under the unified deployment of the China Securities Regulatory Commission, they will step up efforts to implement the various regulatory requirements put forward in the "Management regulations," and formulate supporting self-regulatory rules as soon as possible to ensure that the measures of the "Management regulations" are effective.

Interpretation of quantitative Private Equity Line

With regard to the new rules, Chinese reporters from securities firms interviewed a number of large-scale quantitative private equity companies.

A person with 10 billion yuan of quantitative private equity believes that the core of the new regulations on procedural trading regulation released this time is to focus on trading supervision, standardize procedural trading, strengthen the supervision of high-frequency trading, and enhance the inherent stability of the capital market.

In this person's view, the new regulations add special provisions for high-frequency trading, with a focus on differential charges for high-frequency transactions with a high number and frequency of declaration and withdrawal. There is a kind of fraudulent trading behavior in the market, that is, by making false quotations and then withdrawing orders in the transaction, in an attempt to manipulate the stock market and create an illusion in an attempt to deceive other traders, thus affecting the profit of the stock price. Charging a cancellation fee for those with a higher number of declarations and withdrawals will help to crack down on those "fraudulent" transactions.

"however, it should be noted that quantitative investment, algorithmic trading, programmed trading and high-frequency trading are not a system, and now the outside world seems to confuse them. Quantitative investment is an investment method based on data, with strategic model as the core and programmed transaction as a tool. Therefore, in essence, quantitative investment is methodology, programmed trading is a tool, algorithmic trading is a sub-category of programmed trading, and the prediction cycle of high-frequency trading is very short, which belongs to a special form of programmed trading. At present, programmed trading accounts for more than 70% of the total trading volume in overseas markets. " The above-mentioned quantitative private equity person said.

Another person in charge of large-scale quantitative private equity believes that the new regulatory regulations mainly focus on transactions, and one of the core means is to "declare withdrawal charges", which has a great impact on "pseudo-quantification" such as artificial Tan0 (frequent reporting and withdrawal of orders), while mainstream quantification basically does not participate in such transactions, so it has little impact on mainstream quantitative institutions.

Some people in the industry said that due to the possible increase in transaction fees, the profitability of some high-frequency strategies may be greatly affected. However, this has become a common practice overseas, and some countries levy special financial transaction fees or taxes on algorithmic trading or high-frequency trading.

Experts pointed out that in recent years,JazzyspinscasinoChina's regulatory authorities have brought the procedural transaction into the reasonable and legal regulatory system. At present, the procedural transaction investor reporting system has also been smoothly implemented. In the future, procedural transactions will be more standardized, which will not only help to enhance the regulatory transparency of the quantitative industry, but also crack down on "false quantification" and illegal transactions carried out by using procedural transactions, which will help to promote the healthy and orderly development of the quantitative industry for a long time.