China Issues New Data Security Rules for Money Brokers

The rules set out requirements for money brokers that provide data services to customers. A list of permitted data recipients is published.

Chinese regulators have published new rules aimed at enhancing data security at money brokers in the country.

The rules were released by the NFRA (National Financial Regulatory Administration), PBOC (People’s Bank of China), CSRC (China Securities Regulatory Commission), CAC (Cyberspace Administration of China), and SAFE (State Administration of Foreign Exchange).

The regulators said the rules seek to regulate the provision of data services by money brokers, encourage the reasonable use of data in accordance with the law, ensure data security, enhance market information transparency, promote fair market competition, and promote the high-quality development of the industry.

The rules set out requirements for money brokers providing data services to customers – covering data governance, data security, risk monitoring and assessment, information technology requirements, and risk control capabilities.

The rules also require money brokers to strengthen their processes for reviewing the qualifications of trading institutions that provide quotation data, and avoid publishing data that appears to clearly deviate from market conditions.

Money brokers typically act as middlemen between dealers. The data is typically consolidated and distributed to market participants by data vendors such as Wind Information, Sumscope Information Technology, and Dealing Matrix.

However, in March Chinese regulators suspended bond price feeds of money brokers, citing data security concerns. The move triggered a slump in bond trading turnover as many traders lost immediate access to real-time data. When the price feeds resumed in early April, certain providers like Sumscope were excluded.

The regulators have also now published a list of over 70 institutions to which money brokers can provide data services – including financial infrastructure institutions, valuation firms, and financial information service providers, both foreign and domestic.

The list includes Wind Information Co Ltd, Sumscope, Refinitiv, Bloomberg LP, Dow Jones, S&P Global, CME, ICE Data Services and others.