China hedge funds brace for upheaval from tough new rules

 China’s $715 billion hedge fund industry is facing renewed pressure from stringent regulations coming into effect next month, forcing some investment firms to seek fresh capital from white knights or even shut shop.

New guidelines for the fragmented industry from Aug. 1 will impose higher asset thresholds for funds to operate, and also stricter norms for their investments and marketing.

These rules would come after China’s regulators cracked down on computer-driven ‘quant funds’ this year as part of Beijing’s tighter supervision of the financial industry.