Published On: Sun, Jun 10th, 2012

SZSE Roundtable Conference Held to Discuss Innovation in Trading Mechanism

Shenzhen Stock Exchange Conference

Shenzhen Stock Exchange Conference

SZSE marked its annual “Trading Rules Day” on Tuesday 5th June, 2012 with a round-table conference themed Optimization and Innovation in Block Trading. Representatives from CSRC, overseas exchanges, academia, domestic brokerage and fund management companies attended the conference

SZSE started its block trade system in 2002 as a supplement to the auction-based continuous trading system. While closely monitoring changing market conditions, SZSE has made continuous improvements on its block trade rules and trading platform over the last few year. In early 2009, SZSE upgraded its Comprehensive Trading Platform for Negotiated Deals. In early 2012, SZSE improved the platform’s electronic access to accomodate more investors and facilitate block trade of innovative products. These efforts helped lay a solid technological foundation for further innovation in the Block Trade System.

With surging demand to sell unlocked shares since 2008, SZSE’s block trade market has become increasingly active, attracting market’s attention to its fairness and transparency. In response to this concern, SZSE has strengthened market surveillance and analysis. SZSE is also conducting research to improve its pricing mechanism. In recent years, an increasing number of innovative financial products and services have become available to the market. As a result, it is an important subject to discuss how to provide flexible and diversified block trade services to accommodate a wide range of trading strategies demands from different market participants. It is also a topic of interest to discuss how to establish sound interaction between the auction market and the block trade market. At this “Trading Rules Day” round-table conference, participants discussed trends of development in the block trade, necessity and feasibility of implementing diversified off-auction pricing mechanisms and innovation in block trading system. The proposed improvements on the block trade system are meant to improve overall quality of market performance, meet demand of diversified trading strategies by institutional investors and facilitate listed companies’ corporate restructuring.

Trading rules are the institutional foundation for the exchange to fulfill its roles of market organization and front-end supervision. Trading rules are fundamental for maintaining market security, efficiency and investors’ interests. SZSE has consistently emphasized development in trading rules from the standpoint of protecting the interest of investors, especially mid and small-cap investors. SZSE makes unremitting efforts in maintaining both fairness and efficiency of the market while taking into account different natures of the main board, SME Board and ChiNext Market. SZSE’s research team has been carrying out continuous and systematic research into trading rules.

The “Trading Rules Day” activities have been successfully held for three years since 5 June 2010. It is now a major forum for practitioners from financial institutions and researchers from academia. It has become an effective communications platform for regulatory bodies, exchanges, scholars and frontline market participants. It provides advice for further optimization and innovation in trading rules. SZSE is committed to building fundamental institutional infrastructure in response to changing market conditions, continuously strengthening market services, improving investor structure and reinforcing foundation for sound operation and development of the multi-tier capital market.

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