UPDATE 1 – Chinese regulators tell money brokers to stop their data feed business

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SHANGHAI, March 14 (Reuters) – Chinese financial brokers are preparing to shut down their data feed business in the coming days after being ordered to do so by Chinese regulators on Tuesday due to privacy concerns, sources familiar with the matter told Reuters.

The brokers, which include local joint ventures Tullett Prebon and NEX International Ltd, currently submit price quotes to data providers such as Wind Information Co and Sumscope Information Technology Co. The move could potentially slow trading in the country’s money and bond markets.

The move came after China announced plans to set up a national office to manage its vast amounts of data and a new regulator to consolidate oversight of the financial sector.

Five sources said regulators had instructed brokers to stop their data feed business due to security concerns. A sixth source said regulators had told brokers that conducting data feed operations was outside their licensed business.

According to sources, five of the six Chinese financial brokers, including the joint ventures BGC Partners, Central Tanshi and Compagnie Financiere Tradition, have received the notice from the regulators.

It was not clear whether the sixth broker, Ueda Yagi Money Broking (China) Co., had also received the instruction.

Neither the brokers nor their regulator, the China Banking and Insurance Regulatory Commission, immediately responded to requests for comment.

The ban would force traders to obtain price quotes through social media such as QQ and WeChat rather than popular financial terminals, which could impact trading efficiency and reduce revenue.

“We didn’t do much trading this afternoon. Everyone was busy checking in on private chat groups,” said one trader who asked to remain anonymous. “It seems like we’re all going back to 10 years ago when trading was very manual.”

China has become increasingly concerned about data security in recent years, enacting new laws and compliance requirements for companies that process large amounts of data. (Reporting by Shanghai Newsroom; Editing by Kirsten Donovan and Jan Harvey)