China Tightens Rules on Hedge Funds With Higher Threshold, Curbs
- Rule raises bar on assets, but lower than draft after pushback
- Curbs on derivatives like swaps and options added into rules
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China tightened rules for hedge funds, raising the minimum-asset threshold of the 5.5 trillion yuan ($762 billion) industry while imposing restrictions on the use of derivatives and leverage.
Private securities investment funds need to raise at least 10 million yuan initially to set up, and maintain a minimum 5 million yuan in assets or face liquidation, according to new rules published by the Asset Management Association of China on April 30, after toning down a draft version that fueled concerns about the impact on small players.