As China's stock market struggles to recover, regulators have started to probe some hedge funds and brokerages on quantitative trading strategies amid a growing outcry against a sector able to profit from share price falls and volatility, sources said.
The weakness has triggered finger-pointing in social media, as well as criticism from fund managers and retail investors against these quant funds and short sellers., and some fear fresh probes could lead to tighter regulations on short-selling and certain financing activities by hedge funds.
A better understanding of various quant strategies may lead to regulators curbing those that contribute to market volatility, said one of the brokerage sources."Brokerages in China are more willing to lend securities to quants for shortselling due to their active trading and commission contributions. But it's unfair to other market players who hardly have access to securities lending," said Yuan Yuwei, fund manager at Water Wisdom Asset Management.
"DMA easily raises eyebrows as it involves high leverage, and allows quant funds to make a lot of money," said a brokerage source.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Exclusive-China scrutinizes quant strategies as market weakness stokes public angerExclusive-China scrutinizes quant strategies as market weakness stokes public anger - sources
Read more »
Exclusive: EU to ask China at UN to push Russia towards 'just peace' in UkraineEuropean Council President Charles Michel will ask China directly at the United Nations Security Council to do more to push Russia towards a 'just peace' in Ukraine, according to his draft speech seen by Reuters at the UNGA.
Read more »
Exclusive: German investment in China eases in H1 after record highGerman direct investment in China eased in the first half of the year albeit remaining close to its record high in 2022 and increasing as a share of the country's overall investment abroad, according to official data analysed by the IW institute.
Read more »
I just returned from South China Sea. The CCP is not yet done thereChina is doubling down on militarizing outposts in the South China Sea.
Read more »
Exclusive-UBS names South Korea, India, others as 'slow' to nod Credit Suisse dealExclusive-UBS names South Korea, India, others as 'slow' to nod Credit Suisse deal - document
Read more »
70 Exclusive Snapshots of Celebrities at New York Fashion WeekA behind-the-scenes look at how the most famous faces kicked off fashion month
Read more »