China Cracks Down on Quant Trading Industry with Tighter Regulations

China's regulatory crackdown on quant trading

Overview

The Shanghai and Shenzhen stock exchanges are intensifying their supervision of quant funds and enhancing monitoring of their trades, particularly leveraged products. This move comes in the wake of a three-day trading ban imposed on Lingjun Investment by both exchanges for "abnormal trading behavior." Lingjun has apologized for the incident and is conducting a review of its trading activity. These regulatory actions are part of China's broader efforts to overhaul its financial markets amid ongoing turmoil in the property sector. Earlier this year, Beijing implemented a "zero-tolerance" policy against malicious short selling and appointed markets veteran Wu Qing as chairman of the China Securities Regulatory Commission.