China’s top securities regulator has released new regulations to curb risks associated with program trading, which includes quantitative trading—a controversial practice that has been blamed for triggering stock market turmoil, reports Caixin. The China Securities Regulatory Commission (CSRC) published the final rules on program trading on Wednesday. They will take effect on Oct. 8.
Under the new regulations, stock exchanges and securities firms are required to create a fair environment for different traders. Exchanges need to monitor program trading in real time and set up standards to identify “abnormal trades.” Securities firms shouldn’t provide preferential treatment to program traders and should step up monitoring to prevent risks, according to the regulations.
Program traders will need to report their information—including their accounts, funds, software and trade settings—before they carry out trades.