China warns mutual funds against 'blind expansion'

China's securities regulator has warned fund managers to steer clear of "blind expansion," state media reported Monday, as officials step up efforts to cool the red-hot domestic stock market.
"Companies must avoid blind expansion in the size of mutual funds, beyond management capacity to protect long term interests of investors," the Shanghai Securities News cited the China Securities Regulatory Commission as saying.
The agency also required fund managers to promise they would enforce for six month levels on mutual funds which were advertised when they were initially launched or underwent a restructuring. It also urged fund managers to strengthen management of liquidity risks and enforce rules governing insider trading.