China Tightens Cross-Border Investment Program After Demand Surges

China has tightened a cross-border investment program to limit where global managers can allocate funds for mainland clients, a move that potentially curbs capital going into popular markets like the US, according to people familiar with the matter.

The restrictions are for the decade-old $86 billion Mutual Recognition of Funds scheme, which allows mainland Chinese to invest in Hong Kong-based funds and vice versa. The move is aimed at protecting retail investors flocking to the scheme since last year and applies only to new funds, the people said, asking not to be identified because the matter is private.