Citigroup Inc shut down a $400 million hedge fund that used the bank's money and mathematical models to bet on stocks, in the wake of new regulations aimed at stopping proprietary trading, Bloomberg reported, citing a person familiar with the matter.

Citi, the third-largest U.S. bank by assets, closed the Quantitative Strategies fund after it named fund manager Shakil Ahmed as the head of electronic market-making in April, the news agency said.

Banks might have to spin off their trading platforms once the Volcker Rule -- which prohibits banks from trading for their own profit in securities, derivatives and other financial instruments or investing in hedge funds -- comes into effect.

Citigroup did not immediately respond to requests seeking comment, outside of normal U.S. business hours.

(Reporting by Rachel Chitra in Bangalore)

Citigroup Down