Further Regulating the Registration of Privately Offered Fund Management Institutions

 2018-06-28  44


· Document Number:No. 4 [2016] of the China Fund Association

· Area of Law: Securities

· Level of Authority: Industry Regulations

· Date issued:02-05-2016

· Effective Date:02-05-2016

· Status: Effective

· Issuing Authority: Associations

 

Announcement of the Asset Management Association of China on the Several Issues of Further Regulating the Registration of Privately Offered Fund Management Institutions
(No. 4 [2016] of the Asset Management Association of China)
As required by the Securities Investment Fund Law, the Interim Measures for the Supervision and Administration of Privately Offered Investment Funds, and relevant notices of the State Commission Office for Public Sector Reform, the Asset Management Association of China (“AMAC”) officially launched the registration of privately offered fund management institutions, the recordation of privately offered funds, and self-discipline management from February 7, 2014. Over the last two years, the privately offered fund registration and recordation system has been widely recognized in the industry and by the public. In the rapidly developing privately offered fund industry, a good faith-based self-discipline regulatory system with information disclosure as the core has been initially formed.
During the period of time, the problems in the privately offered fund industry have attracted extensive attention of all social sectors and the regulatory institutions. Numerous good and bad privately offered fund management institutions are intermingled. Some institutions abuse registration and recordation information to illegally enhance credit for themselves. Some institutions have weak consciousness of regulation-compliant operation and information reporting. And some institutions even conduct public offering, insider trading, illegal fund-raising in the name of privately offered fund, and other activities violating laws and rules. Starting from the aforesaid problems and the working practice of the registration of privately offered fund management institutions over the 2 years, to effectively protect the lawful rights and interests of investors, urge privately offered fund management institutions to fulfill the agents' obligations of honesty, credibility, cautiousness, and diligence, and promote the standard and sound development of the privately offered fund industry, relevant issues on further regulating the registration of privately offered fund management institutions are announced as follows:
I. On cancelling the certificates of registration of privately offered fund management institutions
Given the privately offered fund registration and recordation information sharing mechanism has been basically established, to strengthen the social supervision of the privately offered fund industry and realizing effective and dynamic management of the registration of privately offered fund management institutions, the AMAC shall no longer issue electronic certificates for the registration of privately offered fund management institutions, from the date of issuing the announcement. The paper certificates of registration of privately offered fund management institutions and the electronic certificates of registration of privately offered fund management institutions previously issued by the AMAC shall no longer be the certificates for the handling of relevant business. According to the provisions of the Interim Measures for the Supervision and Administration of Privately Offered Investment Funds and the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation), the AMAC shall, by publicizing the basic information on privately offered fund management institutions at its official websites, handle the registration formalities for privately offered fund management institutions.
For the latest information on registration and recordation of privately offered fund management institutions, the real-time basic information on the registration of privately offered fund management institutions publicized on the Privately Offered Fund Management Institutions Publication Platform (http://gs.amac.org.cn) at the website of the AMAC and in the app of “Privately Offered Funds Collection” shall prevail. The public and investors may inquire about relevant information from the aforesaid two official channels.
II. Relevant requirements on strengthening information submission
1. Privately offered fund management institutions shall timely handle recordation of privately offered funds according to the law.
To realize effective supervision of privately offered fund management institutions, and urge registered privately offered fund management institutions to engage in business according to the law and handle recordation of privately offered fund products, the AMAC has proposed the following requirements for privately offered fund management institutions' timely recordation of privately offered funds according to the law:
(1) From the date of issuing the announcement, where a newly registered privately offered fund management institution still fails to handle the registration of the first privately offered fund product within 6 months of the handling of the registration formalities, the AMAC shall handle deregistration formalities of the privately offered fund management institution.
(2) From the date of issuing the announcement, where a privately offered fund management institution that has handled registration formalities for 12 months but has not handled recordation formalities for the first privately offered fund product still fails to handle the recordation of the privately offered fund product before May 1, 2016, the AMAC shall handle the deregistration formalities of the privately offered fund management institution.
(3) From the date of issuing the announcement, where a privately offered fund management institution that has not handled registration formalities for 12 months and has not handled recordation formalities for the first privately offered fund product still fails to handle the recordation of the privately offered fund product before August 1, 2016, the AMAC shall handle the deregistration formalities of the privately offered fund management institution.
If for real business needs, a privately offered fund management institution that has handled the deregistration formalities may re-apply for the registration of privately offered fund management institution as required. For a qualified applicant, the AMAC shall, by announcing the basic information on the privately offered fund management institution at the official website, re-handle the registration formalities for the applicant.
2. Privately offered fund management institutions shall fulfill the obligations of information submission in a timely manner
According to the provisions of the Interim Measures for the Supervision and Administration of Privately Offered Investment Funds and the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation), privately offered fund management institutions shall, through the privately offered fund registration and recordation system, timely fulfill the obligations of submitting and updating the information on the quarterly, annual, and major issues and submitting other information on the privately offered fund management institutions and the privately offered funds managed by them.
(1) From the date of issuing this announcement, according to the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation) and relevant provisions of the AMAC, where a registered privately offered fund management institution fails to fulfill the obligations of submitting and updating the quarterly, annual, and major issues on schedule, before the privately offered fund management institution completes corresponding rectification, the AMAC shall not accept any application of the institution for recordation of any privately offered fund product.
(2) Privately offered fund management institutions that fail to fulfill the obligations of submitting and updating the quarterly, annual, and major issues on schedule twice accumulatively shall be included in the list of abnormal institutions and shall be publicized on the Privately Offered Fund Management Institutions Publication Platform (http://gs.amac.org.cn) by the AMAC. Once publicized as an abnormal institution, a privately offered fund management institution may, even upon completion of the rectification, recover the status of announcement as a normal institution in at least 6 months.
(3) From the date of issuing this announcement, where a registered privately offered fund management institution is included in the list of enterprises with serious criminal activities in the enterprise credit information publication system due to violation of the relevant provisions of the Interim Regulation on Enterprise Information Disclosure, before the privately offered fund management institution completes corresponding rectification, the AMAC shall not accept any application of the institution for recordation of any privately offered fund product. At the same time, the AMAC includes them into the list of abnormal institutions and publicize them on the Privately Offered Fund Management Institutions Publication Platform (http://gs.amac.org.cn). Once announced as an abnormal institution, a privately offered fund management institution shall restore the status of normal institution in at least 6 months, even if the rectification has been completed.
Where an institution that files a new application for the registration of privately offered fund management institution is included in the list of enterprises with serious criminal activities in the enterprise credit information publication system, the AMAC shall not make the registration.
3. Privately offered fund management institutions shall submit audited annual financial reports on schedule
According to the provisions of Article 21 of the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation), privately offered fund management institutions shall, before the end of each April, submit the annual financial reports audited by accounting firms through the privately offered funds registration and recordation system.
(1) From the date of issuing the announcement, where a registered privately offered fund management institution fails to submit audited annual financial reports, before the privately offered fund management institution completes relevant rectification, the AMAC shall not accept any application of the institution for the recordation of its privately offered fund products. At the same time, the AMAC includes them into the list of abnormal institutions and publicize them on the Platform for the Announcement of Privately Offered Fund Management Institutions (http://gs.amac.org.cn). Once announced as an abnormal institution, a privately offered fund management institution shall restore the status of normal institution in at least 6 months, even if the rectification has been completed.
(2) Where an institution that files a new application for the registration of privately offered fund management institution has been formed for 1 year but fails to submit audited annual financial reports, the AMAC shall not make the registration.
III. Relevant requirements on submitting legal opinions
From the date of issuing the announcement, a privately offered fund management institution filing a new application for the registration of privately offered fund management institution or having handled the registration formalities that changes in some major issues shall submit the legal opinions issued by a Chinese law firm through the privately offered funds registration and recordation system. Conclusive opinions on the applicant's registration application materials, industrial and commercial registration information, professional business circumstance, equity structure, actual control, information on affiliated party and branches, operation infrastructure and conditions, risk management system and internal control system, outsourcing information, compliance with laws and regulations, and qualifications of senior executives, among others, shall be delivered item by item in the legal opinions.
Specific applicable circumstances of the Legal Opinions for the Registration of A Privately Offered Fund Management Institutions are as follows:
1. From the date of issuing the announcement, an institution that files a new application for the registration of privately offered fund management institution shall submit the Legal Opinions for the Registration of A Privately Offered Fund Management Institution as indispensible application materials through the privately offered fund registration and recordation system. A privately offered fund management application institution that has filed the application but has not handled the registration formalities before the date of issuing the announcement shall submit the Legal Opinions for the Registration of A Privately Offered Fund Management Institution according to the aforesaid requirements.
2. A privately offered fund management institution that has handled the registration formalities other than the recordation formalities for the privately offered fund product shall, before filing the application for the recordation of privately offered fund product for the first time, supplement the Legal Opinions for the Registration of A Privately Offered Fund Management Institution according to the aforesaid requirements.
3. Where a privately offered fund management institution has handled the registration formalities and the recordation formalities for the privately offered fund product, the AMAC shall, in light of the specific circumstances, require it to supplement the Legal Opinions for the Registration of A Privately Offered Fund Management Institution.
4. A registered privately offered fund management institution that applies for changing the controlling shareholder, the actual controller, the legal representative / executive partner, and other major items, or other major issues prudently identified by the AMAC shall submit the Special Legal Opinions for the Change in the Major Items of A Privately Offered Fund Management Institution.
See Annex for the details of the Guidelines for the Legal Opinions for the Registration of A Privately Offered Fund Management Institution.
IV. Relevant requirements on the fund practicing qualification of senior executives of privately offered fund management institutions
The senior executives (including legal representatives \ executive partners (appointed representatives), general managers, deputy general managers, and persons in charge of compliance / risk control, among others) of various privately offered fund management institutions that engage in privately offered securities investment fund business shall have the fund practicing qualification. At least 2 senior executives of various privately offered fund management institutions that engage in non-privately offered securities investment fund business shall have the fund practicing qualification. Its legal representatives \ executive partners (appointed representatives), and persons in charge of compliance / risk control shall have the fund practicing qualification. The persons in charge of compliance / risk control of various privately offered fund management institutions shall not engage in investment business.
A senior executive of a privately offered fund management institution that meets one of the following conditions may have the fund practicing qualification:
1. He or she passes the examination for fund practicing qualification. The subjects of the fund practicing qualification examination include Subject I, Fund Laws and Regulations, Ethics and Business Specifications, and Subject II, Basics of Securities Investment Fund. According to the Notice of the AMAC on Issues Concerning the Fund Practicing Qualification Examination (No. 112 [2015], AMAC), those who fall under the circumstances as prescribed for the recognition of relevant examination results may be considered passing the fund practicing qualification examinations.
2. He or she is engaged in business relevant to investment management in the most recent 3 years and meets the relevant conditions for the accreditation of qualifications. Such circumstance mainly means that he or she is engaged in business relevant to asset management in the most recent 3 years and the annual average assets under management exceed 10 million yuan.
3. He or she has passed the securities practicing qualification examination, the futures practicing qualification examination, or the banking practicing qualification examination, or meets the relevant conditions for the accreditation of qualifications; or has passed the certified public accountant examination, legal professional qualification examination, professional qualification examination for certified public valuers, and other relevant financial qualifications examinations, and meets the relevant conditions for the accreditation of qualifications.
4. Other circumstances identified by the qualifications accreditation committee of the AMAC.
A senior executive of a privately offered fund management institution planning to obtain the fund practicing qualification through the accreditation method as prescribed in item (2) and (3) shall also pass the Subject I, Fund Laws and Regulations, Ethics and Business Specifications of the fund practicing qualification examination, before he or she is identified as obtaining the fund practicing qualification.
A senior executive of a privately offered fund management institution having obtained the fund practicing qualification shall, as required by the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation) and the Notice on Issues Concerning Fund Practicing Qualification Examinations, receive 15-hour follow-up training in each year, to maintain his or her fund practicing qualification.
A registered privately offered fund management institution shall, according to the aforesaid provisions, conduct self-examination of the information on its senior executives' obtaining of fund practicing qualification, and file an application for the change in the major issues of the qualifications of senior executives through the privately offered fund registration and recordation system before December 31, 2016, to complete the rectification. Where rectification is not conducted during a certain period, the AMAC shall not accept any application of the institution for recordation of privately offered fund product or change in other major issues. The AMAC shall continue to publicize the relevant information on the fund practicing qualification of relevant senior executives of the institution on the Privately Offered Fund Management Institutions Publication Platform (http://gs.amac.org.cn).
Where any relevant provision previously issued by the AMAC is inconsistent with the Announcement, the Announcement shall prevail.

Annex: Guidelines for the Legal Opinions for the Registration of A Privately Offered Fund Management Institution (Omitted)
Asset Management Association of China
February 25, 2016