New short-term trading regulations take effect today. The high-frequency quantification defines "reducing frequency to 15 trades/sec." The viral post is spreading wildly—here's the truth.

Day trading rules for short-term trades begin to take effect today (April 7).

The CSRC issued “Several Provisions on the Regulation of Short-Term Trading” on March 6 this year. There are two core takeaways:

First, it clarifies the regulatory arrangements for short-term trading by major shareholders holding more than 5% of shares, as well as directors, supervisors, and senior management (i.e., directors, supervisors, and senior executives). The core purpose is to prevent insiders from using information advantages to profit through short-term trading, and to maintain market fairness.

Second, from the standpoint of its purpose, it encourages long-term capital to enter the market.

However, from the time the new rules were released to their formal implementation, the market spread many misunderstandings. Combined with volatility in A-shares during the period, posts about quantitative strategies became the focus. Among them, the rumors that spread the most were “high-frequency quantification downsampling” and “equal channel access when withdrawing exchange machine-room exclusive co-location.”

Is high-frequency quantification recognized as downsampled to 15 trades per second? Quantitative private funds refute it: false

Among the market rumors, one directly misrepresented the new rules for short-term trading as new rules for quantification. This post claims, “Frequency limits, speed reduction, removal of privileges, strong transparency, plugging loopholes—directly constraining high-frequency quantification reshapes market fairness.” The post further states that under the new quantification rules, the threshold for high-frequency recognition—set at申报+撤单≥300 trades per second—will be reduced to ≥15 trades per second, lowering the threshold by 20 times.

After the post claiming “the reporting frequency of high-frequency algorithmic trading has been pushed down to 15 trades per second” went out, one securities analyst said plainly, “Every group chat is circulating it; I’m starting to doubt life.” Even fund managers are worried that downsampling high-frequency quantification could impact the market.

A Caixin Media (??) reporter contacted multiple quantitative private funds to verify, and found that they had not received the above requirements.

Another securities analyst said that these short-term trading rules regulate trading behavior by shareholders holding more than 5% or other senior executives: trading that sells within 6 months after buying, or buys within 6 months after selling. It has little to do with ordinary investors, and it has nothing to do with high-frequency quantification.

“From a logic standpoint, the post is also nonsense. The 300 trades per second high-frequency trading rule took effect only in 2025. This month’s April implementation is the short-term trading rule; if any adjustment were needed, it should be done in tandem by scrapping last year’s high-frequency trading rule. But currently, there has been no scrapping.” The securities analyst said.

Looking back at the regulatory history of high-frequency quantification: while the development of domestic quantitative trading has effectively improved market liquidity, high-frequency quantification has also drawn criticism such as unfair trading. Therefore, improving relevant regulations has also been put on the agenda. On June 7, 2024, the procedural trading rules were opened to public consultation. On April 3, 2025, they were formally released. On July 7 of the same year, the “Implementation Rules for the Administration of Algorithmic/Procedural Trading” officially took effect. Differential fee structures for high-frequency trading are about to be implemented, and management of procedural trading reports, trading behavior, information systems, and so on has been further refined.

Among them, the regulatory criteria for recognizing high-frequency trading are:

1. Trades per second and/or cancels per second ≥300, or trades per day ≥20k;

2. The Shanghai, Shenzhen, and Beijing Stock Exchanges may adjust the standards and implement differentiated management.

As early as 2025, there were rumors in the market that “the high-frequency trading frequency in the new rules will be reduced from 299 times per second to 30 times.” At that time, multiple quantitative private funds stated the rumor was untrue, and the existing regulatory standards had not been adjusted.

Further investigation by Caixin Media revealed that this new wave of rumors may have come from a proposal by a financial commentator, Pi Haizhou. After the two sessions (the National People’s Congress and the Chinese People’s Political Consultative Conference) in March, Pi Haizhou published an article calling for stricter regulation of high-frequency quantification trading to curb excessive speculation.

Specifically, he suggested adopting mature international market practices to impose stricter regulation on quantitative trading. For example, lower the recognition standard for high-frequency quantification trading from the current ≥300 trades per second or ≥20k trades per day to 15 trades per second; and also clearly prohibit “deception,” requiring that each order message must retain a minimum time of no less than 50 microseconds to prevent extremely instantaneous order cancellations.

Judging from the content of the post, several data points are consistent with the above proposal.

Withdrawing exchange machine-room exclusive co-location? In progress, but not much related to the short-term trading rules

Alongside the short-term trading rules, another post directly targets “trade access equality,” namely the withdrawal of exchange machine-room exclusive co-location, leveling the speed between institutions and retail investors.

This rumor had already surfaced in November 2025. The most common claim was that exchanges require brokerages to move their machine rooms away from the exchange, and it points directly to single institutions renting brokerage seats as exclusive channels—leading to unfair trading.

Insiders said that by late 2025, some brokerages had already received relevant notifications requiring that one brokerage gateway correspond to 10 or more clients, reducing situations where a single client has an advantage in trading speed.

Previously, there were not few instances of brokerages “cutting corners to run ahead” to access market data. Faced with extreme pursuit of low latency by institutional clients including private fund clients, some brokerages violated fair trading and had a strong desire to “front-run.” Often, with assistance from vendors (providing pre-market-data parsing technology), they bypass the exchange’s required market-data gateway interface to obtain market data early, thereby maximizing business expansion.

Regulators have repeatedly emphasized these matters, and exchanges have issued multiple documents to comprehensively standardize brokerages’ access to exchange services. However, it is still not possible to fully eliminate certain “front-running” behaviors.

In addition, a Caixin Media reporter also learned that recently some brokerages received a notice from the exchange titled “Notice on Adjusting Measures for the Management of Host Trading Co-location.” To protect investors’ legitimate rights and interests and maintain the safe and stable operation of the securities market, the exchange requires related rectifications for host trading co-location—for example, only providing 10M wide-area network interconnection. The rectification needs to be completed by the first half of this year.

Some market participants also pointed out that the ongoing push to improve trading fairness by regulators continues, but it is not closely related to the short-term trading rules currently being implemented.

The short-term trading rules have four key points

Returning to the rules themselves, the core purpose is to prevent insiders from using information advantages to profit through short-term trading and to maintain market fairness.

The main content includes:

First, clarifying the scope of applicable entities and securities. The rules state that when buying and selling, the person must have the identity of a major shareholder or director/supervisor/senior executive at both the time of buying and the time of selling—or the opposite: the person has such identity at the time of selling but not at the time of buying. Trading that meets these conditions is brought under institutional management and must comply with the short-term trading system. The scope of affected securities is clarified to include shares and depository receipts, exchangeable corporate bonds (hereinafter referred to as exchangeable bonds), convertible bonds, and other equity-type securities.

Second, clarifying how to recognize and calculate holdings and trading time points. The rules provide that the trading time points are the securities transfer registration dates. The major shareholder’s shareholding ratio is calculated by combining the shares issued domestically and abroad by the same listed or listed company. The number of securities held by overseas investors through different channels is also combined for calculation, and so on.

Third, clarifying 13 exempted situations. Authorized by the Securities Law of the People’s Republic of China and combined with regulatory practice, it clearly states 13 exempted situations, including preferential share conversion, ETF subscriptions and redemptions, grants, registration, and exercise related to equity incentives, judicial compulsory enforcement, market-making transactions, share repurchases ordered for fraudulent issuance, and other 13 exempted situations—supporting market development and regulatory needs. Meanwhile, it also states that related situations involving seeking illegal benefits by exploiting information advantages will not be exempted.

Fourth, for circumstances where securities accounts are opened separately by professional institutions according to products or portfolios, holdings are calculated separately for each “one code通” account based on each product or portfolio. This includes domestic and foreign publicly offered funds, the National Social Security Fund, basic pension insurance funds, annuity funds, insurance funds, collective private asset management products managed by securities and futures fund management institutions, private securities investment funds that meet regulatory requirements, and so on—to facilitate trading, promote opening up to the outside world, and encourage long-term capital to enter the market. At the same time, it is clarified that if the above products or portfolios cannot achieve independent standardized operation or if there are conflicts of interest, violations of laws and regulations, and other such circumstances, they will not be calculated separately.

(Source: Caixin Media)