Chinese regulators ask money brokers to suspend data feed business - sources


Adds quote from trader, background

SHANGHAI, March 14 (Reuters) - Chinese money brokers are preparing to suspend their data feed businesses in the coming days after being instructed to do so by Chinese regulators on Tuesday due to data security concerns, sources familiar with the matter told Reuters.

The brokers, which include the local joint ventures of Tullett Prebon and NEX International Ltd, currently feed price quotes to data vendors such as Wind Information Co and Sumscope Information Technology Co, and the move could potentially slow trading in the country's money and bond markets.

The move comes after China announced plans to form a national bureau to manage its troves of data, as well as a new regulatory body consolidating oversight of the financial sector.

Five sources said the brokerages were told by regulators to suspend the data feed business due to data security concerns. A sixth said regulators told the money brokers that conducting data feed operations was beyond the scope of their licensed business.

Five of China's six money brokers, which also include the joint ventures of BGC Partners, Central Tanshi and Compagnie Financiere Tradition, had received the notice from regulators, according to sources.

It was not clear if the sixth broker, Ueda Yagi Money Broking (China) Co, had also received the instruction.

Neither the money brokers nor their regulator, the China Banking and Insurance Regulatory Commission, immediately responded to requests for comment.

The ban would force traders to receive price quotes via social media tools such as QQ and WeChat, rather than through popular financial terminals. That could impact trading efficiency and hurt turnover.

"We did not do much trading this afternoon. All hands were on joining private chat groups," said a trader who declined to be identified. "It seems we are all going back to 10 years ago when trading was very manual."

China has in recent years grown more concerned over data security and has rolled out new laws and compliance requirements for companies that handle large amounts of data.

(Reporting by Shanghai Newsroom; Editing by Kirsten Donovan and Jan Harvey)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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