Multiple private fund firms said they began receiving notices from cooperating
broker-dealers on the evening of June 23 that Chinese regulators have ordered a
suspension on increases to managers' cross-border total return swap (TRS)
capacity. The instruction has prompted firms that use cross-border TRS to access
overseas markets to reassess strategies; sources said existing positions are
largely unaffected for now but new allocations cannot be expanded, and some
products face sell-only, no-replacement constraints. No formal regulatory notice
has been published to date.
