(Yicai) July 29 -- Chinese regulators are reportedly considering raising the transaction fees for high-frequency trading by 10 times to CNY1 (14 US cents).

The increase will be one of the specific measures to constantly enhance regulation targeting algorithmic trading, with the fee for calling off transactions being CNY5 per deal, The Paper reported on July 27. The plan is a stage for soliciting opinions, according to market insiders.

The Chinese regulators held a meeting regarding the scheme of differentiated charges on HFT to solicit opinions from market institutions, with some private equity fund firms also taking part, the insiders noted.

"Costs for HFT will be greatly increased if the fee hike gets implemented based on the draft version," a source from a private equity fund manager noted. Market insiders have expected a significant hike in transaction fees for HFT, the person said. "The specific pricing will only be known after the issuance of the regulatory document." 

The plan of differentiated charges on HFT is going through research and verification, relevant executives from the Shanghai and Shenzhen bourses noted on July 16. The related charging mechanism would be improved based on sufficient assessments and calculations to make corresponding regulations focus better on HFT, they added.

The move is one of the specific details indicating that stock exchanges have continually strengthened their regulation targeting algorithmic trading and boosted the implementation of relevant policies and measures under the China Securities Regulatory Commission's uniformed arrangements since the start of this year.

To normalize the signing of consignment agreements of algorithmic trading, the Securities Association of China drafted the demonstration text for consignment agreements of algorithmic trading. It defined that an investors' transactions will be regarded as HFT if they meet one of the following conditions: the maximum number of deals applied and canceled per second by a single account on a single bourse tops 300 or that the maximum number of transactions applied and canceled per day by a single account on a single bourse exceeds 20,000.

Editor: Martin Kadiev