What’s new: China’s top securities regulator has denied rumors that quantitative trading might come to an end on the domestic commodity futures market, as speculation swirled earlier this week that related transaction costs would go up.
The rumor, which the regulator called unfounded, spread Wednesday along with speculation that domestic futures exchanges might adjust their commission fee rebates in a way that is less favorable to quantitative trading, which typically relies on high-frequency buying and selling in large volumes.
The next day, the stock prices of several futures firms dipped, with Nanhua Futures Co. Ltd. (603093.SH) tumbling more than 6%.
While denying suspension of quantitative trading, the China Securities Regulatory Commission (CSRC) did not offer details on how the futures exchanges might adjust their rebate policy for this year. In a Thursday Q&A, the CSRC just said that the exchanges will “improve and adjust” their commission policies.
The background: China’s futures exchanges offer a complex variety of rebates on their commission fees, including those for members with high trading volumes. Typically, the exchanges release their preliminary rebate policies at the beginning of every year.
The 2024 policies will be announced after the exchanges run them through their Communist Party committees and boards of directors as per procedure, sources with knowledge of the matter told Caixin.
Read more In Depth: The Murky World of High-Frequency Futures Trading in China
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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