Liu Jipeng: The identification standard for high-frequency quantitative trading of 300 transactions per second needs optimization! Is it not high-frequency quantitative trading if there are 299 transactions per second? You can still pile orders and cancel orders!

Special Topic: Strengthening the Defense Line for the Rights and Interests of Small and Medium Investors — Sina Finance 3.15 Investor Protection Forum

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On March 13, Sina Finance held the 3.15 Investor Protection Forum, featuring a keynote speech by Liu Jipeng, Professor at the Business School of China University of Political Science and Law and a well-known expert in the capital markets.

Liu Jipeng stated that the core foundation of the capital market lies in fairness. Investors can accept gains and losses under fair competition, but they have always struggled to accept unfair phenomena in the market. This is the core issue affecting current market sentiment, with rule loopholes in quantitative trading being a typical example.

Currently, regulators set a threshold of 300 trades per second for high-frequency quantitative trading, but this number lacks substantive meaning. Even if trading frequency drops to 299 trades, quantitative institutions can still create false market signals through frequent order placements and cancellations, misleading ordinary investors.

This phenomenon also prompts the market to re-examine the essence of quantitative trading. Its core competitive advantage lies in “speed,” which manifests in two aspects: first, the speed of information acquisition. Although market information should be fair and open to all investors, quantitative firms can leverage technological advantages to capture information and execute trades ahead of others; second, trading execution speed. Quantitative firms can host their trading servers directly in exchange data centers, gaining millisecond-level trading advantages—hardware conditions that ordinary retail investors do not possess.

Beyond technological disparities, rule-based inequalities are also significant. Institutional investors can use tools like securities lending, stock index futures, and various derivatives to short-sell, providing them with flexible strategies to respond to market changes. In contrast, most small and medium retail investors cannot participate in these types of trading, placing them at a clear disadvantage in market competition.

Against this backdrop, establishing a fair trading mechanism that considers the interests of all parties has become an urgent need for market development. Since the capital market always emphasizes protecting small and medium investors, it is worth exploring whether, under current national conditions, institutional design can provide retail investors with appropriate special considerations. By adjusting rules to bridge the technological and tool gaps between institutions and retail investors, the fairness of the capital market can be truly realized. This warrants in-depth discussion among regulators and all market participants.

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Editor: Chang Fuqiang