· Area of Law： Securities

· Level of Authority： Industry Regulations

· Date issued：06-30-2016

· Effective Date：06-30-2016

· Status： Effective

· Issuing Authority： Associations

Questions and Answers regarding Private Fund Registration and Recordation (X)
(Asset Management Association of China, June 30, 2016)
Question: In the policy achievements of the Eighth Round of China-U.S. Strategic and Economic Dialogue, China welcomes qualified wholly foreign-owned enterprises and joint ventures to apply for registration as management institutions of private securities funds to engage in private securities fund management business, including trading in securities on the secondary market, according to domestic regulations. What are the requirements for wholly foreign-owned and joint-venture management institutions of private securities funds to apply for registration as private securities fund managers?
Answer: In accordance with the policy achievements made in the Seventh and Eighth Rounds of China-U.S. Strategic and Economic Dialogue and the seventh China-Britain Economical and Financial Dialogue, with the approval of the China Securities Regulatory Commission (“CSRC”), to engage in the management of private securities funds within the territory of China, a wholly foreign-owned or a joint-venture management institution of private securities funds should register as a private securities fund manager with the Asset Management Association of China (“AMAC”), and meet the following conditions:
(1) The management institution of private securities funds is a company formed within the territory of China.
(2) The foreign shareholder of the management institution of private securities funds is a financial institution approved or licensed by the financial regulator of its country or region of residence, and the securities regulator of its country or region of residence has entered into a memorandum of understanding on securities regulatory cooperation with the CSRC or any other agency recognized by the CSRC.
(3) The management institution of private securities funds and its foreign shareholder have not received any serious punishment by the regulators or judicial authorities in the most recent three years.
If a management institution of private securities funds has a foreign actual controller, the foreign actual controller should also meet the aforesaid conditions (2) and (3).
In conducting the business of private securities investment funds, a wholly foreign-owned or a joint-venture management institution of private securities funds should, in addition to the Securities Investment Fund Law, the Interim Measures for the Supervision and Administration of Private Investment Funds, the Measures for the Registration of Private Investment Fund Managers and Recordation of Funds (for Trial Implementation), and other laws and regulations, comply with the following provisions:
(1) It should use its capital and RMB funds obtained from foreign exchange settlement in accordance with the relevant provisions issued by the foreign exchange administrative departments of the state.
(2) In trading in securities and futures within the territory of China, it should make investment decisions independently, and should not place trading orders through an overseas institution or system, except ass otherwise specified by the CSRC.
Question: How do wholly foreign-owned and joint-venture management institutions of private securities funds register as private securities fund managers?
Answer: To apply for registration as a private fund manager, a wholly foreign-owned or a joint-venture management institution of private securities funds should faithfully enter and submit the following information through the private fund registration and recordation system (https://pf.amac.org.cn):
(1) Relevant registration information on a private securities fund manager as required by the Measures for the Registration of Private Investment Fund Managers and Recordation of Funds (for Trial Implementation) and the relevant provisions issued by the AMAC, including supporting materials on the conditions set forth in the aforesaid Question and Answer.
(2) A letter of undertaking for private fund registration and recordation, in which the applicant undertakes that the information and materials submitted are true, accurate, and complete and contain no false record, misleading statement, or material omission, and that it will abide by China's laws and regulations and self-regulatory rules on private funds.
(3) A Legal Opinion on the Registration of a Private Fund Manager issued by a Chinese law firm and its designated lawyers. In addition to the requirements of the Guidelines for the Legal Opinions on the Registration of Private Fund Managers, the law firm and its designated lawyers should, in the legal opinion, express a conclusive opinion on whether the applicant meets the registration conditions and requirements set forth in the aforesaid Question and Answer.
Where the registration application materials provided by a wholly foreign-owned or a joint-venture management institution of private securities funds are complete, the AMAC will, within 20 working days of receiving all materials, register it by publishing the basic information on the private fund manager on the official website of the AMAC (http://www.amac.org.cn).
After registration, the wholly foreign-owned or joint-venture management institution of private securities funds should conduct the business in a timely manner in accordance with the law. After the completion of the fundraising for a private securities investment fund formed by it, it should, according to the relevant provisions, undergo recordation formalities with the AMAC in a timely manner through the private fund registration and recordation system, and perform the information reporting obligations of the private fund manager and the private funds under its management on schedule, such as the quarterly, annual, and major event reporting and updating.
Wholly foreign-owned and joint-venture management institutions of private securities funds may, through the column of “private fund registration and recordation system” on the official website of the AMAC (http://www.amac.org.cn), read the operating guide to the private fund manager registration and private fund recordation system and relevant policy information. For further information, you may follow the WeChat official account of the AMAC, email to the private fund registration and recordation inquiry mailbox at pf@amac.org.cn, or call the national unified hotline on private funds at 400-017-8200.