In order to strengthen the risk control and safeguard the market's fairness, the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE) and China Securities Depository & Clearing Corp., Ltd. (CSDC) have co-made the "SSE, SZSE & CSDC Rules on Front-end Risk Control for Capital of Securities Trading" and detailed supporting rules, which shall be released on December 1, 2017 upon approval by the China Securities Regulatory Commission (CSRC) and shall come into force on June 1, 2018.
According to an official, the system of front-end risk control for capital of securities trading (the front-end control for short) is to carry out front-end control on the total intraday net buying applying amount for the participant business unit (PBU) of any businesses including proprietary business and assets management business of market participants such as the SSE, the SZSE, CSDC, fund companies and insurance companies according to the deployment of the CSRC, with an aim of cementing the aforesaid institutions' daily trading management under the condition of not affecting their normal trading, better maintain the trading and settlement order, safeguard the market's fairness, protect legitimate rights and interest of investors, especially small and medium-sized investors, and guarantee the securities market's sound operation. The system will exert no influence on the normal trading of ordinary investors.
The official reminded that before the official implementation of the rules on the front-end control, all the relevant institutions should, as required, build their internal control systems and reconstruct technological systems. Next, the SSE, the SZSE and CSDC will carry out business trainings, technological tests and on-site inspections, so as to guarantee the sound implementation of the rules on the front-end control.