China Tightens Rules on Hedge Funds With Higher Threshold, Curbs

(Bloomberg) — China has tightened rules for hedge funds, raising the minimum asset threshold of the 5.5 trillion-yuan ($761 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 (AMAC) on April 30, after toning down a draft version that fueled concerns about the impact on small players.