China opens a regulated DMA pathway for QFIs and private fund managers

On 28 August 2026, the Securities Association of China (SAC) and the Asset Management Association of China (AMAC) jointly issued the Administrative Rules for Securities Companies' Trading Information System Access (Trial) (《证券公司交易信息系统接入管理规范（试行）》), which took effect immediately upon publication. The new rules replace the long-standing 2015 external system access framework and establish a formal regulatory regime governing access by investors' trading systems to securities brokers' trading infrastructure.

The rules are significant because they provide, for the first time, a transparent and standardised pathway for securities firms to offer trading system access services (commonly referred to as DMA arrangements) to eligible clients, subject to filing, testing, risk management and ongoing supervision requirements.

From a practical perspective, the key development is that the framework expressly contemplates access by qualified investors, including QFIs, and eligible private securities fund managers, provided relevant qualification and compliance requirements are met. The rules also require securities firms to conduct full "look-through" management, monitor connected systems and trading activities, and ensure fair treatment of all connected clients without preferential technical arrangements.

For global quantitative managers and systematic trading firms, the announcement represents one of the most meaningful developments in China's onshore equities market infrastructure in recent years.

Analysis: Why this matters and what has changed

For many years, systematic trading in A-shares has occupied a regulatory grey area.

Although Chinese regulators gradually became more comfortable with algorithmic and quantitative trading strategies, particularly following the introduction of programme trading reporting requirements during last year, one critical piece of market infrastructure remained largely unavailable: direct market access (DMA).

In practice, although CSRC historically contemplated that brokers could provide clients with direct connectivity to exchange-facing trading systems, the applicable conditions were never clearly articulated. Faced with regulatory uncertainty, most brokers adopted a conservative approach and largely ceased providing traditional DMA services to external clients, including QFIs.

As a result, most QFIs seeking to implement systematic equity strategies relied on a "high-touch" execution model, typically using FIX connectivity to transmit orders to brokers for execution. Market participants also developed various workarounds, including Direct Strategy Access (DSA) arrangements and broker server-rental structures. While these solutions enabled a degree of automation, they were generally operationally cumbersome, less suitable for lower-latency strategies, and in some cases, raised concerns around intellectual property protection and allocation of regulatory responsibility.

The newly issued rules should be viewed against the backdrop of regulators' broader objective of promoting market fairness. In recent years, regulators have taken steps to reduce infrastructure-based trading advantages, including tightening exchange colocation arrangements and effectively requiring client servers to be moved out of exchange facilities. The policy focus at that stage was on eliminating perceived disparities in market access and execution speed.

The new framework signals an evolution in regulatory thinking. Rather than restricting direct access because of fairness concerns, regulators now appear prepared to permit it, provided there is full transparency, clear accountability and effective oversight.

Summary

In our view, the significance of the rules lies not simply in the formal recognition of DMA, but in the establishment of a clear and transparent regulatory pathway. The regulatory emphasis has shifted from restricting access to ensuring that access is fully visible, traceable and subject to effective supervision.

For QFIs and quantitative managers, this could be one of the most consequential infrastructure developments in the onshore equities market in recent years. Assuming brokers become comfortable implementing the framework, eligible investors should increasingly be able to obtain DMA through a recognised regulatory route, rather than relying on alternative structures such as DSA or server-rental arrangements.

More broadly. the rules represent another indication that Chinese regulators are seeking to balance market fairness with market development: allowing greater technological sophistication and execution efficiency, while maintaining full regulatory visibility and control. For global systematic and quantitative managers that have historically viewed China A-share strategies as operationally challenging, the framework may finally provide a viable foundation for scalable and compliant DMA-based execution.

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Should you have any questions or require further assistance regarding any of the above, please do not hesitate to contact Melody Yang at YaoWang Law Offices (our strategic alliance firm in China Mainland).