Thousands of Tiny Hedge Funds Face Closure in China Shakeup
- Draft rules expected to kick in as soon as next month in China
- Regulations will benefit big players as small rivals shut
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China’s 6 trillion yuan ($832 billion) hedge fund industry is bracing for a historic shakeup that will likely cause thousands of smaller managers to shut and impose stricter regulations on larger peers that have become a growing force in local markets.
Draft rules set to take effect as soon as September will impose a 10 million yuan asset minimum on Chinese hedge funds, a threshold that is expected to force the liquidation of more than a third of the existing products tracked by Shanghai Suntime Information Technology Co. The rules will also cap leverage levels and the size of investments hedge funds can make in single securities.