Multiple private fund managers said they received notices from cooperating
brokerages overnight instructing them to suspend additions to managers'
cross-border TRS (total return swap) exposure. TRS lets funds capture returns on
overseas assets without moving principal offshore. The move follows a May
CSRC-led, eight-agency implementation plan illegal targeting cross-border
securities and futures fund operations and recent enforcement actions against
brokers including Tiger Brokers, Futu Holdings and Longbridge Securities. After
a strong run in global tech this year, many private funds had been using
cross-border TRS to increase overseas tech exposure; the notice halts new TRS
scale increases.
