New Registration Requirements and Deadline for PRC (People's Republic of China) Domestic PE (Private Equity) Funds and Managers
Domestic Chinese private equity managers should take notice of new provisional regulations requiring registration of domestic Chinese private equity managers and filings with the Asset Management Association of China (“AMAC”). Also, Chinese private equity managers should take notice of an impending deadline to register with AMAC.
The long-anticipated registration and filing system for domestic Chinese private equity managers set up in China (“Fund Managers”) and domestic Chinese private equity funds (“Funds”), Measures for the Registration of Private Investment Fund Managers and Filling of Private Investment Funds (for Trial Implementation) (the “Measures”) went into effect on February 7, 2014, following its promulgation on January 17, 2014. Also, with the Measures in effect, the China Securities Regulatory Commission, which has authorized AMAC to govern fund managers and filings, had announced a deadline for private equity managers to register with AMAC; registration must be done by April 30, 2014.
The amended Securities Investment Fund Law, promulgated on December 28, 2012 and effective on June 1, 2013, now governs private offerings. It requires Fund Managers to perform registration formalities and make fillings for PE Funds under their management with the AMAC. On June 27, 2013, the State Commission Office for Public Sector Reform (the “SCOPSR”) issued the Notice on Division of Duties in Private Equity Fund Administration, specifying that the China Securities Regulatory Commission (the “CSRC”) is charged with the supervision and regulation of Private Funds (See Article: CSRC Became Sole Regulator of PE Industry | China Law Update Blog for more information).
As the regulatory organization authorized by the CSRC, AMAC performs regulatory and supervision roles towards the registration of Fund Managers and filings of Funds – thus, AMAC formulated the Measures, including the requirements and procedures for the registration.
The Measures requires, among other things, the registration of Fund Managers, the filing of Funds, and the reporting of information:
A. Registration of Fund Managers: Fund Managers are required to register with AMAC through a designated filing system and apply for AMAC membership.
B. Filing of Funds and Fund Managements: Upon completion of a Fund, its Fund Manager is required to file with AMAC by providing such Fund’s investment objectives and relevant information of the Fund including its name, size, investors, fund agreement (i.e. the management contract entered into among the Fund Manager, each investor in the Fund and the Fund’s custodian, if any), etc. Basic information and changes in such information regarding the senior management and professionals of the Funds are required to be reported to AMAC as well.
C. Information Report: Fund Managers are required to make quarterly and annual filings with AMAC providing certain updated information of the Funds under their management, and notify AMAC of significant changes in a timely manner.
After the issuance of the Measures, AMAC published on its official website (http://www.amac.org.cn/) a guide to the procedures of the registration and launched the on-line registration system (http://pf.amac.org.cn).
The Deadline for Registration of Fund Managers
Following the issuance of the Measures, on March 7, 2014, the CSRC, on its weekly press conference, announced the April 30, 2014 deadline for Fund Managers to complete registration with AMAC. As indicated on the same conference, CSRC will take regulatory actions against Fund Managers failing to complete the registration by such date.
According to the data released by the CSRC, by March 17, 2014, 1196 firms have registered in the system, of which 399 firms have completed the registration process via the on-line system. On March 17 and 25, 2014, the AMAC launched two certificate granting ceremonies, and issued the Private Equity Fund Manager Registration Certificates to over 100 Fund Managers.