China”s securities regulator will continuously enhance regulatory mechanisms for algorithmic trading and effectively prevent the abuse of technological advantages as part of broader efforts to promote the high-quality development of the fund industry, China Securities Regulatory Commission Chairman Wu Qing said on Saturday.
Speaking at the fourth members’ congress of the Asset Management Association of China, Wu said the CSRC will conduct in-depth research and consistently strengthen regulatory mechanisms for program trading, with a greater focus on fairness and compliance.
Targeted supervision will be strengthened to crack down on market manipulation and other violation activities that disrupt market order, Wu said.
He noted that algorithmic trading has become an important trading method in major global markets, including China. Given that individual investors account for the majority of market participants in China, regulators have introduced a series of rules and strictly regulated abnormal trading activities.
Wu added that China’s fund industry is at a critical stage of shifting from quantitative expansion to high-quality development, adding that the country aims to make breakthrough progress in building world-class investment institutions during the 15th Five-Year Plan (2026-30) period.
Efforts will be taken to further enhance the institutional framework for the fund sector to accelerate the transition from prioritizing asset scale to prioritizing investor returns, Wu said.
“The industry shall not return to the old path of chasing scale and making quick money,” he said.
According to Wu, the regulator is formulating a three-year action plan to implement a recent State Council guideline on strengthening regulation, preventing risks and promoting the high-quality development of private investment funds, while improving a regulatory framework covering market entry, ongoing supervision, risk resolution and industry development.
Over the past five years, the Chinese fund industry’s stock investments rose 41 percent to 13.4 trillion yuan ($1.98 trillion), while private equity and venture capital funds have injected 5.25 trillion yuan in innovation capital into unlisted enterprises. Mutual funds now manage more than 39 trillion yuan in assets and have distributed 2.5 trillion yuan in dividends over the period, official data showed.
Despite the progress, Wu said the sector still faces structural challenges, including a relatively low share of equity funds and the need to further strengthen international competitiveness and resilience against external risks.