Chinese money brokers cut data feeds to vendors after regulator ban - traders (updated)

Compagnie Financiere Tradition SA

15/03/2023 08:04

(Adds more details, background)
       SHANGHAI, March 15 (Reuters) - Chinese money brokers cut
data feeds to vendors on Wednesday after a ban from regulators,
traders said, sending participants in the country's $21 trillion
bond market scrambling for workarounds as Beijing tightens its
grip on data.
        The brokers, which include the joint ventures of Tullett
Prebon and NEX International Ltd, were told on Tuesday to
suspend the data feed business by Chinese regulators, sources
told Reuters on Tuesday. Regulators cited data security
concerns, and the fact that money brokers are not licensed to
feed data to third-party vendors, the sources said.
        Traders said that starting on Wednesday morning, bond
price quotations from the money brokers, which also include
ventures of BGC Partners, Central Tanshi and Compagnie
Financiere Tradition, could not be displayed on financial
terminals including qeubee, Wind and Dealing Matrix.
        Chinese bond traders have heavily relied on these data
platforms for real-time price quotes, so the sudden data ban
sent traders scrambling to join QQ or WeChat messaging groups
for price information. 
        "The change has made trading very inefficient," said a
trader at a foreign bank. "The way other traders quote the price
in the messaging groups, the price would expire before I find my
counterparty."
    The market disruption from the ban, most likely the
government's first move to tighten data management since
announcing plans to set up a national data bureau, underlines
how tighter screws could bring fresh uncertainty to business
operations.
        During the past few years, Beijing's tighter scrutiny of
data security has ravaged the business of Didi Global, and
almost halted overseas listings by Chinese companies.
  
        The data feed ban shows how "under China's increasingly
conservative policies, security is more important than
efficiency," said an executive of an affected vendor, who
declined to be identified because of the sensitivity of the
matter.     
  
        Neither the money brokers nor their regulator, the China
Banking and Insurance Regulatory Commission (CBIRC), have
responded to requests for comment.    
     
  
        OTC TRADING     
  
        Unlike stock trading, which takes place in centralised
exchange markets, bond trading in China is largely executed in
an over-the-counter market where traders identify counterparties
through price quotations.
  
        As key players in the bond ecosystem, data vendors such
as Wind Information Co, Sumscope Information Technology Co and
Dealing Matrix consolidate real-time bond quotes from money
brokers, lubricating trading.
  
        Some vendors' platforms had blank pages where prices
used to be contributed by money brokers, according to screens
seen by Reuters.
  
        Many bond traders say the data feed cut affected their
jobs and made trading less efficient. 
  
        "We did not trade anything this morning," said one
trader who declined to be identified, adding that more traders
could utilise iDeal, an instant messaging platform vetted by
China Foreign Exchange Trade System (CFETS).
  
        Another trader at a foreign bank said: "I haven't been
able to join any private messaging groups due to compliance
issues. So the current situation feels like trading blindly." 
  
        Key data vendors have been rushing to roll out
alternative services to solve traders' headaches. 
  
        Wind said on Wednesday that it was launching two major
schemes to provide real-time direct bond quotations: WQ and WM.
The bond quotation function interface WQ allows traders to make
and manage quotations, while WM, or Wind Messenger, allows
traders to communicate and negotiate on bond quotations.
  
        Dealing Matrix said it has launched a platform for
traders to get the latest price information from bond market
makers on the Shanghai Stock Exchange.    
  

 (Reporting by Winni Zhou, Li Gu, Jason Xue, Samuel Shen and
Brenda Goh; Editing by Kim Coghill)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))