As stocks in China continue slipping, the Asian country’s securities watchdog has started looking into the impact of computerized trading on the share market. It hopes to stop the current volatility of stock prices.
In its latest bid to restore calm to the domestic stock markets, Chinese authorities confirmed Friday that they’d started investigating automated trading practices and their role in the continued sliding of many shares.
China’s two main stock markets have lost about 30 percent of their value since mid-June, with authorities bending over backwards to prevent a further sell-off.
The China Securities Regulatory Commission (CSRC) said it was looking into institutions and individuals and their role in program or automated trading, which it said had amplified big fluctuations on the stock market.
The practice of computerized automated trading typically involves transactions being carried out at high speed on a large number of stocks.
The Shanghai and Shenzhen exchanges put limits on 24 accounts, the CSRC said in a statement on its website without naming the account holders or detailing the restrictions now in place.
But Alpha Squared Capital CEO Wang Feng explained the watchdog was “only targeting those who use program trading to frequently submit and then cancel bids, thus disturbing the market and manipulating prices.”
Reuters reported the two main stock exchanges said the accounts in question would be suspended until October 30.
hg/ lvw (Reuters, AFP)