Exclusive-China scrutinizes quant strategies as market weakness stokes public anger

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Exclusive-China scrutinizes quant strategies as market weakness stokes public anger - sources

SHANGHAI - As China's stock market struggles to recover, regulators have started to probe some hedge funds and brokerages on quantitative trading strategies amid a growing outcry against a sector able to profit from share price falls and volatility, sources said.

Global quant fund houses including Winton and Two Sigma have operations in China, but it's not clear if the foreign players are being probed. The weakness has triggered finger-pointing in social media, as well as criticism from fund managers and retail investors against these quant funds and short sellers.

A better understanding of various quant strategies may lead to regulators curbing those that contribute to market volatility, said one of the brokerage sources. Short-selling activities by quant funds could also be caught in the crossfire, he said.

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