Global banks warn draft trading rules could kill off billions in investment

Global banks and investors have signed a letter warning China’s regulators that draft rules to curb high-speed trading would inadvertently undermine major investment channels worth about US$160 billion–including the Hong Kong-Shanghai Stock Connect, Reuters reported. The Asia Securities Industry & Financial Markets Association’s letter to the China Securities Regulatory Commission said rules to stop “program trading” domestically would mean foreign firms couldn’t send electronic trades from Hong Kong to brokers onshore. “The proposed restriction on investors using algorithmic trading to connect to Chinese brokers onshore is huge – if you can’t use automated systems, you can’t trade on Stock Connect,” said one person involved in drafting the letter.