China is removing servers used by high-frequency trading firms from local exchanges’ data centers, a move that could narrow the speed gap between professional traders and ordinary investors, according to people familiar with the matter. Retail traders may see slightly more balanced execution, while high-frequency firms lose milliseconds of advantage in commodities and futures markets.China Exchanges Relocate HFT Servers GloballyCommodities futures exchanges in Shanghai and Guangzhou have ordered brokers to relocate client servers outside bourse-run data centers, according to Bloomberg. The Shanghai Futures Exchange told brokers that high-speed clients must move equipment by the end of next month, while other clients have until April 30, the people said. The change is led by regulators and affects both domestic and global firms, including Citadel Securities, Jane Street Group and Jump Trading.High-frequency traders rely on servers located in exchange data centers to gain milliseconds in execution, an edge in markets where every millisecond matters. Firms do not place servers directly in exchanges but use local brokers for access. Some brokers are also relocating servers for high-frequency clients away from the Shenzhen Stock Exchange’s data centers.Exchanges Plan Two-Millisecond HFT DelayPreliminary plans at futures exchanges could introduce an additional two milliseconds of latency for servers connecting from third-party computer rooms, the people said. While the delay is minor for most investors, it could impact global high-frequency strategies in stock index futures, convertible bonds, and commodities.🇨🇳China Clamps Down on High-Speed Traders, Removing Data ServersChina is removing servers for high-frequency traders from local exchanges’ data centers, targeting both domestic and global firms. Shanghai and Guangzhou commodities exchanges ordered brokers to relocate equipment,… pic.twitter.com/iQQeq0Ajbo— CN Wire (@Sino_Market) January 16, 2026“High-frequency traders may adjust their strategies and are likely to reduce their trading frequency in the short term, thus reducing brokerage fees and server hosting fees,” said Shen Meng, director at Beijing-based investment bank Chanson & Co. He added that firms will “continue to design new solutions in the future.”Chinese Shares Fall After HFT ScrutinyThe move follows broader regulatory efforts to ensure market stability. Earlier this week, authorities tightened rules on margin trading. Some ETF trades by foreign market makers have also been scrutinized. Chinese shares fell after the news, with the CSI 300 Index dropping after an earlier gain, and copper futures on the Shanghai exchange fell about 1%.High-frequency trading in China has drawn regulatory attention for years. Accounts placing more than 300 orders per second or more than 20,000 requests per day dropped 20% in 2024, according to the China Securities Regulatory Commission. This article was written by Tareq Sikder at www.financemagnates.com.

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