China must be quick when dealing with computerized stock trading, a source with China Securities Regulatory Commission (CSRC) said Monday.
Program trading, or the trading of stocks or other products executed by a computer program, was detected in recent stock market volatility, according to the source, who is familiar with the matter but declined to be named.
Some suspect accounts withdrew more than 80 percent of submitted orders, "disturbing normal price signals," the source said.
As the market stabilizes and confidence remains fragile, the abnormal transactions of such accounts could seriously hurt market stability, the source said.
China should continue to increase supervision on program trading, as it may bring systemic risks if it is used to manipulate the market, the source said.
Since Friday, the Shanghai and Shenzhen stock exchanges have restricted the trading on 34 accounts involved in abnormal transactions, data showed.
China's benchmark Shanghai Composite Index plunged 14.34 percent in July, the largest monthly drop since August 2009. The index dropped 1.11 percent Monday, the first trading day in August.
