Criminal regulation of high frequency trading on China's capital markets

The securities regulatory authority and judicial department launched investigation into allegations of market manipulation by high frequency trading companies after the recent capital market crash in China. But in the absence of any criminal prosecutions under Article 182 of the Criminal Code of the People's Republic of China till now, the potential scope of the criminal violation of market manipulation remains uncertain in the context of high frequency trading. Notwithstanding the fact that high frequency trading is not ostensibly referred as one of the forms of criminal behaviors under Article 182, the statutory text of Criminal Code is sufficiently broad, and the mechanism of criminal law interpretation is legally and legitimately efficient, to catch high frequency trading schemes when the prosecutor can demonstrate that they have created a distorted price and (or) volume.