China's stock exchanges said on Monday they were temporarily restricting trading by hedge fund manager Lingjun Investment as a penalty for what they said was "abnormal trading".
The fund's program-generated order to sell stocks in early trade on Monday coincided with quick declines in the stock market, the Shenzhen and Shanghai stock exchanges said, adding they would restrict Lingjun's trading until Feb. 22.
Lingjun did not immediately respond to a Reuters request for comment.
One of China's biggest hedge fund companies focusing on quantitative investing, Lingjun manages over 60 billion yuan ($8.34 billion) in assets, according to the fund manager.
The penalty comes just days after China's securities watchdog, led by newly installed chairman Wu Qing, held a series of seminars with market participants who proposed tighter scrutiny of company listings and trading behaviour to revive market confidence. The market dropped to five-year lows early this month.
Quant funds trade rapidly using derivatives and data-driven computer models. Such funds attracted the attention of regulators last year in China amid a growing outcry against a sector able to profit from share price falls and volatility.
($1 = 7.1972 Chinese yuan renminbi)
