November 2, 2018 / 3:01 PM / 8 months ago

Shanghai exchange says has ended verbal guidance in market to ensure fairness

FILE PHOTO: Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China, March 7, 2016. REUTERS/Aly Song/File Photo

SHANGHAI (Reuters) - The Shanghai Stock Exchange said on Friday it has ended its practice of giving market players verbal guidance as a way of regulating the market, as it seeks to avoid interfering with trading and create a level playing field for investors.

The exchange’s statement comes days after China’s securities regulator said it would reduce “unnecessary intervention” in the market - representing a major change in the way the regulators respond to market volatility.

Beijing’s practice of giving verbal messages or “window guidance” in the stock market has long drawn complaints from foreign investors, who said such things discriminated against some investors while favoring others.

The Shanghai bourse said in a statement on Friday that since a period of market weakness began in June, it has no longer resorted to this practice.

It also said it has largely refrained from other restrictive measures such as suspending trading accounts.

When it has come across activity such as excessive speculation, the exchange said it had mainly resorted to sending letters urging its members to flag trading risks to investors.

During a period of turmoil in Chinese markets from mid-2015 to early 2016, the securities regulator restricted selling activities by fund managers and blamed short-sellers for triggering a panic that sent ripples across global markets.

Reporting by Samuel Shen and John Ruwitch in Shanghai; Editing by Hugh Lawson

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