China bans high-speed trading channels for quant funds, dragging down stock market turnover
RegulationPrice Action
Chinese authorities have issued measures prohibiting securities firms from connecting to trading systems via local area networks, a high-speed channel used by quant funds to send automated orders. As a result, the CSI 300 Index saw volatility drop to its lowest level since June, but market turnover fell close to a three-month low. Analysts view this move as reflecting the Chinese government's intention to reduce volatility and prevent sharp corrections, at the cost of shrinking liquidity and potentially wider bid-ask spreads.
