SHANGHAI (Reuters) - China's funds regulator said on Monday it has canceled the licenses of over 10,000 funds, amid a crackdown on the country's poorly regulated fund management sector, which has been dogged by runaway managers and misappropriation of investments.
The move comes after the hedge fund industry was thrown into disarray earlier this year as managers rushed to comply with stringent new rules.
"Some funds registered in reality had no intention of getting into the business," the Asset Management Association of China (AMAC) said in a note posted on their official website.
"Some engaged in illegal fundraising for illegal and criminal activities under the guise of funds, cheating the public," the note added.
New rules introduced by AMAC that took effect in July require fund managers to fully disclose their investment risks, review the identities of investors, and set up special accounts to manage capital.