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China exchange suspends US firm’s stock trading account

SHANGHAI – China’s Shenzhen stock exchange has “suspended” a trading account used by a unit of Citadel, the US-based hedge fund said Monday, after authorities restricted several accounts in the wake of a market rout.

The China Securities Regulatory Commission (CSRC) said on Friday that the Shanghai and Shenzhen exchanges had imposed limits on 24 unidentified accounts on “suspicion of influencing securities trading prices or other investors’ investment decisions”.

It blamed them for heightened volatility on the exchanges, which have seen wild swings in recent weeks as Shanghai plummeted 30 percent before the government intervened with a rescue package.

Citadel, which had more than $25 billion under investment as of March, said that an account of its Citadel Securities unit, a separately operated provider of liquidity and market-making services, had been suspended in Shenzhen.

The account in question is managed by a Chinese firm, it said.

“We continue to otherwise operate normally from our offices, and we continue to comply with all local laws and regulations,” a Citadel spokesman said in a statement.

“Citadel has been actively investing in the region for 15 years, and has always maintained a constructive dialogue with regulators, including during the recent market volatility,” the statement said.

Restrictions had been applied to at least 34 accounts in total by Monday according to statements by the two exchanges, 14 in Shanghai and 20 in Shenzhen.

State media said that some were suspected of placing buy or sell orders to influence prices, then not executing the trades.

The CSRC did not detail the limits, but under China’s securities laws the regulator can bar traders from buying and selling.

Xinhua said late Sunday that one of the 24 accounts in the initial batch was owned by Citadel, but cited state-owned CITIC Securities as denying it was involved with that particular account.


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