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China’s Three Largest Exchanges to Stop Disclosing Real-Time Trading Volume Data

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that China’s three major stock exchanges (the Shanghai Exchange, Shenzhen Exchange and Hong Kong Exchange) will stop disclosing real-time trading volume data starting in mid-May so as to reduce market volatility. The announcement has triggered concerns about downgraded data transparency in the market.

As part of the Chinese State Council’s recent market guidelines, a key effort is the tightening of control over high-frequency trading in mainland Chinese markets. The Shenzhen exchange regulator said that the move to cut real-time market data disclosures was aimed at “unifying investor practices” so as to ensure “fair access to information”.

The newly-announced exchange rules may further reduce foreign investability in China’s equity markets and restrict Hong Kong’s role as a gateway for investment into China. Since 2014, foreign investors have been allowed to invest in A-shares through the Shenzhen-Hong Kong Stock Connection and the Shanghai-Hong Kong Stock Connection. Real-time data is critical for fund managers, especially hedge funds, to measure liquidity and execute their trades in a timely fashion.

The Shanghai and Shenzhen exchanges are China’s two primary mainland stock exchanges. As of Monday, the A-shares market value on these exchanges was 71.21 trillion RMB (about US$9.84 trillion). A-shares are RMB-denominated shares of mainland Chinese companies, generally only available to trade by domestic investors and certain qualified foreign institutional investors.

Source: Sina, April 19, 2024