The Shanghai and Shenzhen Stock Exchanges jointly conducted compliance training with 20 quantitative private equity firms, which sparked market speculation. The focus is on compliance and risk prevention, reminiscent of whether quantitative trading will be liberalized and whether risks can be fully controlled. In addition to the core content, it also focuses on reiterating abnormal trading behavior and paying attention to the impact of trading behavior on the market. The purpose of this action is to allow quantitative institutions to examine themselves, better fulfill their responsibilities, and standardize trading behavior.
*Concerns about quantitative trading, does this compliance training signal the liberalization of quantitative trading? The market is divided on this. At the same time, whether the risk of quantitative trading can be fully controlled is also the focus of attention. The complexity and high-frequency nature of quantitative trading raise concerns about whether it can effectively deal with potential risks. What the real purpose of this training will be remains to be observed and evaluated by the market.
In view of abnormal trading behaviors, this training emphasizes the importance and vigilance of them. Rapid quantitative trading may bring about violent market fluctuations and affect market order. Through this action, the regulator hopes to urge quantitative institutions to strengthen self-discipline and avoid excessive impact on the market caused by abnormal behavior. For the market, stability and stability are the most important foundations, and the emergence of abnormal trading behavior may undermine this foundation.
Unlike previous regulators, which focused on external monitoring, this training requires quantitative institutions to actively pay attention to the impact of their trading behavior on the market. When the market environment is fragile, does the frequent operation of quantitative institutions exacerbate the uncertainty of the market? Quantitative institutions should be more prudent and meticulous in carrying out transactions, so as to operate in an orderly manner and avoid destroying the market balance due to the blind pursuit of profits. Quantitative institutions should not only pursue their own interests, but also take into account the overall interests of the market, and achieve a win-win situation is the way to sustainable development.
How to achieve self-regulation in quantitative trading is a question that the current market needs to think about. The original intention of quantitative trading is to optimize market liquidity, increase the diversity of market participants, and promote market development to a certain extent. However, as some quantitative institutions use their own advantages to manipulate and undermine the market, market instability has increased, and higher requirements have been put forward for supervision. Only when quantitative institutions return to norms and operate in a compliant and stable manner can the virtuous cycle of the market be truly realized. Quantitative institutions should abandon opportunistic behavior and return to the role of increasing liquidity and stabilizing the market.
Through the compliance training action jointly carried out by the Shanghai and Shenzhen Stock Exchanges and quantitative private equity institutions, we can see the importance that the regulatory authorities attach to the quantitative trading market. As an innovative form of financial market, quantitative trading not only brings development opportunities, but also derives some risk challenges. While the regulator strengthens the standardized management of quantitative trading, quantitative institutions should also reflect on and improve themselves, pay attention to compliance and legal operation, and participate in the market with a steady and stable attitude. In the future, we hope to see more quantitative institutions treat the market with a standardized and responsible attitude and jointly build a good financial ecosystem.