BEIJING (Reuters) – Shanghai Minghong Investment Management Co, one of China’s largest quantitative hedge funds, has been banned from registering new products for three months due to “inappropriate” staff behaviour, the Asset Management Association of China said.
Shanghai Minghong failed to conduct effective internal control over issues such as employees’ “inappropriate comments” about the company’s peers on social media and failed to promptly urge them to make rectifications, the association said in a statement dated Sept. 29.
The Shanghai branch of the China Securities Regulatory Commission admonished Shanghai Minghong over the same issue at the end of August, saying the failure to implement effective internal controls was a failure to fulfil their obligations of prudence and diligence.
The measures against Shanghai Minghong, established in 2014, come as the sector rapidly expands, with total funds managed nearly doubling to more than 1.08 trillion yuan ($148 billion) in 2021 from a year earlier, according to industry estimates.
Shanghai Minghong could not be immediately reached for comment on Saturday due to a public holiday in China.
($1 = 7.3010 Chinese yuan renminbi)
(Reporting by Ryan Woo and Tina Qiao; Editing by Kirsten Donovan)