Feb 29, 2024 05:35 AM

FINANCE

Securities Watchdog Tells Quant Funds to Downsize Popular Strategy

By Yue Yue and Han Wei

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The CSRC has acted to reduce the leverage of Direct Market Access to help ensure stability in market operations

The CSRC has acted to reduce the leverage of Direct Market Access to help ensure stability in market operations

China’s securities regulator is tightening its grip on a popular and highly leveraged quantitative trading strategy that is blamed for fueling the recent stock market upheavals.

The China Securities Regulatory Commission (CSRC) in a Wednesday statement promised to gradually reduce the size and leverage of Direct Market Access (DMA), a business model widely used by quantitative funds. The move will help control risks and ensure the stable and healthy operation of the market, the regulator said in the statement.

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