New regulations in China's fund management industry have resulted to the shutting down of at least 10,000 private wealth management firms in the country in the past six months.

According to a statement released by the Asset Management Association of China (AMAC) most of those companies that were closed did not meet the standards set by the association for the industry.

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AMAC is the self-regulatory association of China's fund management companies.

Some companies that have registered with AMAC did not have the sincere willingness to develop their asset management business, the association said.

"Some companies do not meet the basic operation standards, while some companies are running irrelevant businesses like peer to peer lending, private lending, or even illegal businesses under the cover of private hedge fund firm," AMAC said in a statement.

The closure of the more than 10,000 private wealth management companies in China started on 5 February, when AMAC issued a set of rules that require fund managers to submit records of the products they have issued, among others.

The new rules also require all fund managers and senior managers of private hedge fund companies to pass the exam this year of they will be barred from managing and raising private funds.

The association said it has cancelled the registration of more than 10,000 private wealth manager firms in China in two batches, leaving the country with more than 16,000 registered managers for privately raised funds.

The stricter industry rules were introduced to curb illegal fundraising activities in the country. The incidents of illegal fundraising cases increased in 2015, according to the association.

China's private wealth management industry had been unregulated until the introduction of the country's new fund law in June 2013.

TagsChina Money, China Private Wealth Management, China Wealth Management