China's Premier Li Qiang has signed a state council resolution implementing a regulation on the control and administration of private investment funds.
The regulation, with 62 items in seven chapters, will come into effect September 1, 2023, the state council said in a statement.
The regulation aims to foster the standardized and healthy development of the private investment fund industry, safeguard the legitimate rights and interests of investors, and encourage the industry to further play a role in serving the real economy and promoting scientific and technological advancements.
The regulation clarifications the scope of application, specifies the obligations and requirements of private fund managers and custodians, regulates fundraising and investment operations, makes special provisions for venture capital funds, and strengthens control, management and legal liability.
China is mulling several policies to promote the sustained recovery of its economy, according to a State Council executive meeting on June 16.
The private investment fund sector has developed rapidly in China, serving the real economy and supporting entrepreneurship and innovation, the meeting said, adding that specialized administrative regulations will help protect investors and safeguard the healthy development of the sector.
5 Comments
Katchuka
The regulation gives the government significant control over the private investment fund sector, potentially leading to bureaucratic red tape and inefficiencies.
AZUK00
The regulation enhances supervision and management of private investment funds, ensuring compliance with regulations and reducing the likelihood of misconduct or fraud.
AZUuuuu
The regulation's strict requirements and obligations for private fund managers may restrict their ability to adapt to changing market conditions, stifling creativity and innovation in the industry.
KittyKat
Given the government's involvement in the regulation, there is a risk of favoritism towards certain private investment fund managers, creating an uneven playing field for investors.
Noir Black
While the regulation aims to protect investors, it does not place enough emphasis on investor education and awareness, potentially leaving them ill-equipped to make informed investment decisions.