He Qiang Suggests Creating "Quarantine Zone" for Quantitative Trading: Let Institutions Battle Each Other, Oppose Targeting Retail Investors!

Special Topic: Strengthening the Defense Line for the Rights and Interests of Small and Medium Investors — Sina Finance 3.15 Investor Protection Forum

On March 13, the Sina Finance 3.15 Investor Protection Forum was held, with Professor He Qiang from the Central University of Finance and Economics School of Finance and Honorary Director of the Securities and Futures Research Institute delivering a keynote speech.

Regarding the controversial quantitative trading in recent years, He Qiang candidly expressed his views. “Quantitative trading actually has its advantages, such as increasing trading volume and even forming a price consensus, theoretically speaking.” He does not completely deny quantitative trading but firmly opposes allowing institutions to leverage technical advantages to dominate small and medium investors in China’s retail-dominated market.

“Some say the US also engages in quantitative trading. Why can’t China develop it?” He Qiang asked in return. “Because China’s stock market is different from the US. Most investors in the US are institutions, with few retail investors. Retail investors mostly join funds, and funds trade stocks on their behalf. Institutions compete with each other, like foreign guns and cannons fighting foreign guns and cannons—that’s fair.”

“99% of investors in China are retail investors,” He Qiang emphasized. “Using foreign guns and cannons to fight with long swords and spears is absolutely unfair.”

Regarding how to regulate quantitative trading, He Qiang proposed two specific suggestions:

First, strengthen regulation of quantitative trading; otherwise, it will seriously harm the interests of small and medium retail investors.

Second, consider carving out a “broad space” for quantitative trading—such as index futures, options, and even large-cap blue-chip stocks and major banks in the spot market where institutions gather. “Define a scope where institutions can compete with each other. Moreover, large-cap stocks are generally less active, and conducting quantitative trading here can help activate them.”

“Quantitative trading should not be conducted on retail investors,” He Qiang stated firmly. “Retail investors are a vulnerable group.”

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Editor: Shi Xiuzhen SF183