Chinese regulators are restricting the duration of new bond funds to curb investment in long-dated treasuries amid efforts to cool a bond rally. The securities watchdog has asked major mutual fund companies to cap the duration of new bond funds at two years, according to sources. This cap aims to limit funds that invest in medium- and long-dated bonds. The restrictions apply only to new bond funds managed by top mutual fund companies. The China Securities Regulatory Commission has not commented. The move follows the People’s Bank of China’s request for financial institutions to report daily changes in long-term treasury bond positions. This comes as investors seek safe harbours amid economic uncertainty, driving a bond rally and pushing long-dated yields to record lows.