Chinese money brokers cut data feeds to vendors after regulator ban – traders

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SHANGHAI — 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.

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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.

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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 centralized exchange markets, bond trading in China is largely executed in an over-the-counter market where traders identify counterparties through price quotations.

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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 utilize 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.”

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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)