CSRC investigates IMC on futures trading activity, company says

Dutch high- frequency trading company IMC said on Thursday that China’s securities regulator is investigating its trading activity in the Chinese futures market.

IMC, one of the world’s largest financial market makers, said in an e- mailed statement it had received enquiries from the China Securities Regulatory Commission ( CSRC) in relation to futures trading undertaken by IMC’s Shanghai- based affiliate.

IMC said discussions with the CSRC have been constructive and positive.

“In response to the enqui- ries, IMC has cooperated fully, providing all relevant information as well as providing personnel to explain IMC’s trading strategies,” said IMC, which provides liquidity to exchanges in the countries and regions such as the US, Europe, Australia, Chinese mainland and Hong Kong.

“IMC has confirmed with external counsel that its futures trading activity in China complied with all applicable regulations and exchange rules,” the statement said.

The CSRC was not immediately available for comment. The investigation was first reported by Bloomberg.

The move follows a broader crackdown by Chinese authorities on automated trading following the stock market rout in 2015, which saw the mainland shares fall 30 percent.

China also turned its focus on automated trading strategies suspecting some hedge funds of deliberately or accidentally distorting pricing in search of quick profits.

The regulators also opened investigations into a number of trading firms and froze dozens of trading accounts, including an account belonging to Citadel Securities’ affiliated firm in Shanghai, another major foreign high- frequency trading firm.