Chinese Asset Management Association Tightens Hedge Fund Rules

Feb 5 2016 | 9:23pm ET

The Asset Management Association of China (AMAC) has announced plans to revoke the licenses of hedge fund firms that do not launch actual products within twelve months of registration.

The step, which was announced on the association’s website, is aimed at cracking down on financial scams in the country, according to Reuters. More than two-thirds of China's 25,841 registered hedge fund houses have yet to launch any actual fund products, noted AMAC, with many operating peer-to-peer lending, private loans, guarantee and even illegal fundraising businesses. 

Going forward, new registrants will have six months to roll products out. Moreover, certificates evidencing registration will no longer be issued by AMAC as some alleged managers use them to inflate credibility and otherwise mislead investors.

The move comes as China grapples with a wave of financial scams that have come to light as the country’s stock market goes through nearly unprecedented volatility and the nation’s vaunted growth rate slows. 

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