British hedge fund Meditor Capital Management Ltd. reportedly said that it would shutdown its European equity business. The investment firm cited an internal review and new European rules that restrict short selling as reasons behind the possible closure. 

Investopedia defines short selling as a sale of a security that is not owned by the seller or that the seller has borrowed. 

Reuters, citing an earlier report by Bloomberg, said Meditor Capital could liquidate most of its fund within a few weeks. British tycoon Talal Shakerchi runs the USD3 billion hedge fund firm. 

Shakerchi in a note sent to investors said that they should eliminate carve outs. Carve outs allow individual money managers to have control over portions of the fund, the report said. 

The British asset manager blamed European rules that require hedge funds to disclose their bearish bets against companies for hurting the firm, Reuters said. 

Shakerchi in a letter also disclosed that the rules disadvantage larger managers who actively short like Meditor. He added that he was no longer confident that the fund could continue to offer good value to its clients at the current scale, the report said.