CSRC’s New Regulations on Programme Trading

China's approach to programme trading regulation continues to evolve rapidly. In 2025, the China Securities Regulatory Commission (CSRC) and all major exchanges have issued a comprehensive set of rules and implementation measures, covering both the securities and futures markets, as well as Stock Connect.  

Melody Yang, Funds and Regulatory Partner, Co-Head of Shanghai YaoWang Law Offices (our strategic alliance firm in China Mainland), summarises the key regulatory developments and highlights the main obligations for market participants: 

As we are now several months into the full implementation of the programme trading rules, we have observed the following key developments while assisting clients with compliance: 

• Programme trading rules: The issuance of programme trading rules last year reflects regulators' proactive stance in embracing new strategies and aligning with global market practices. 

• Swaps and monitoring challenges: In the absence of hedging tools and leverage, swaps remain a primary channel for accessing China's equities market. Key questions persist around how swap positions should be monitored - across all cash and swap positions, at the broker level, or institution-wide - with practices differing by trading strategy. 

• Stock Connect oversight: Hong Kong regulators are applying stricter scrutiny to Stock Connect investors. While rules historically focused on sell-side brokers, buy-side participants registered with HKEX are now also subject to market abnormality rules. 

• Colocation and market data access: With colocation no longer a viable method of obtaining market data, participants are reassessing proximity setups and required consents - whether via QFI, WFOE, or swaps. The new rules have reshaped the landscape, prompting a re‑evaluation of how best to achieve efficient and compliant access to market data. 

I. Regulatory Developments in the Securities Market 

1. CSRC and SSE/SZSE Programme Trading Rules 

The CSRC's "Regulation Measures on Programme Trading in the Securities Market (Trail)" (effective 8 October 2024) established the national framework for programme trading in the securities market. The Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) subsequently issued the "Implementation Rules for Programme Trading Management" (effective 7 July 2025), which provide detailed requirements for market participants engaging in programme trading on the SSE/SZSE, including both domestic and Stock Connect investors . 

Key Points: 

• Scope: Programme trading is defined as trading in which computer programmes automatically generate or execute trading instructions, including but not limited to algorithmic trading, high-frequency trading (HFT), and other automated strategies. Both discretionary and non-discretionary strategies using programme trading software are covered. 

• Reporting: 

  • Initial reporting is required before engaging in programme trading, including details on account, capital, leverage, trading strategies, software, and technical systems. 

  • Material changes (e.g., capital scale, leverage, trading strategy, software, or technical system) must be reported within five trading days of the change. 

  • HFT participants must report additional information, such as maximum order rates and daily order counts . 

• Enhanced monitoring and Abnormal Trading: The SSE/SZSE may carry out enhanced monitoring towards the following trading behaviour:

• Trading that is captured as HFT, which refers to the programme trading with the following feature (which may evolve over time):

  • More than 300 declarations/cancellations per second in a single account; or

  • More than 20,000 declarations/cancellations per day in a single account

• Abnormal trading activities such as frequent order cancellations, price manipulation, large trades in a short period and etc.

• The SSE may adjust these thresholds and will focus on real-time monitoring and differentiated fee arrangements for HFT.

• DMA and Colocation: The framework paves the way for eligible brokers to re-activate DMA for external clients, subject to further technical details; though in practice, however, regulators are currently assessing the viability of colocation arrangements and appear to be reducing their availability. This has, in turn, led to the growth of proximity hosting solutions, which offer a feasible-albeit somewhat less efficient-alternative. 

• Overseas Investors:  

  • The rules explicitly cover overseas investors trading via the Qualified Foreign Investor (QFI) scheme, Stock Connect, and swap arrangements. However, regulators appear to have adopted a comparatively lighter touch approach toward overseas investors engaging in quantitative trading via swap structures. In particular, such investors are not currently required to make full disclosures of their underlying swap transactions or to comply with all market abnormality requirements on a consolidated basis across all their trading activities, by cash and synthetically. Regulation of swap trading may continue to evolve once the Derivatives Trading Administrative Measures (Trial) is effective in November 2026.

• Other securities exchanges: they would largely follow the same requirements of SSE/SZSE.  

2. Stock Connect: SSE Guidance No.2, SZSE Guidance No.3 

The SSE issued "Securities Trading Rules Application Guidance No. 2 - Programme Trading Reporting for Northbound Stock Connect Investors" (effective 12 January 2026), and SZSE issued "Securities Trading Rules Guidance No. 3 - Programme Trading Reporting for Northbound Stock Connect Investors" (effective 12 January 2026)", which align Stock Connect reporting obligations with those for domestic investors.

Key Points:

• Scope: Applies to all Stock Connect investors using programme trading for A-shares via the SSE/SZSE.

• Reporting:

  • Stock Connect investors must report programme trading information (including account, capital, leverage, trading strategy, software, and technical system) to their Hong Kong brokers, who then report to the SSE/SZSE via the Hong Kong Exchange (HKEX).

    • Initial reporting is required before trading; material changes must be reported within five trading days.

    • HFT thresholds and reporting obligations are the same as for domestic investors.

• Abnormal Trading: Stock Connect investors are subject to the same abnormal trading behaviour monitoring and differentiated fee arrangements as domestic investors.

• Template: The SSE/SZSE provide a standard reporting template for Stock Connect investors.

II. Regulatory Developments in the Futures Market

1. CSRC and Exchange Rules

The CSRC issued the "Regulation Measures on Programme Trading in the Futures Market (Trial)" (effective 9 October 2025), which set the national framework for programme trading in the futures market . All futures exchanges have issued their own detailed rules which assemble with each other.

Key Points (common across all exchanges):

• Scope: Applies to all programme trading (including overseas participants) in the futures market. According to guidance from these exchanges, the current quantifiable standard for "programme trading" in the futures market is defined as the occurrence of 10 or more instances of placing 10 or more orders (regardless of underlying contract) within 1 second by the same client on the same trading day.

• Reporting:

  • Initial reporting is required before engaging in programme trading, including account, trading, and software details.

  • Material changes must be reported within 30 trading days.

    • HFT participants must report additional information, such as trading strategies, maximum order rates, and technical system details. Standards for HFT now exist in a verbal guidance form.

    • Existing programme trading participants must complete reporting within six months of the effective date.

• Abnormal Trading:

  • Exchanges specify abnormal trading behaviours, including excessive order placements/cancellations, high order-to-trade ratios, and large, consecutive, or dense order placements in a short period.

  • Exchanges may adjust thresholds and implement differentiated fee arrangements for HFT.

• DMA and Colocation:

  • DMA and colocation are in theory permitted, but colocation becomes less and less accessible.

IV. Conclusion

The regulatory framework for programme trading in China is now highly harmonised across the securities and futures markets, with clear and detailed requirements for most areas of reporting, monitoring, and risk management. Areas to watch include evolving policies for HFT participants, developments in colocation and DMA, as well as the implications for swap investors.

Should you have any questions or require further assistance regarding any of the above, please do not hesitate to contact Alan Tang at Simmons & Simmons or Melody Yang at YaoWang.