CHINA: An Introduction to Investment Funds (PRC Firms)

How to Establish RMB Private Equity Investment Fund in China 

Introduction: 

RMB private equity investment fund as referred to herein means an investment vehicle established in mainland China that raising funds from qualified investors[1] in the way of private offering and managed by a private fund manager ("Manager"), the purpose of which is conducting investment activities. This article will briefly introduce the regulatory overview and key points for the establishment of an RMB private equity investment fund in China.

1 Common Structure of an RMB Private Equity Investment Fund 

RMB private equity investment funds include three legal forms, i.e. limited partnership, corporation and contract, among which limited partnership is mostly adopted by RMB private equity investment funds.

A Limited partnership fund shall have and only have one Manager and at least one general partner (GP) and one limited partner (LP). The GP can be the Manager or the Manager's affiliate. The Manager can charge management fee from the fund and the GP usually receives carried interest.

2 Supervision on RMB Private Equity Investment Fund 

1) Regulatory Authorities 

China Securities Regulatory Commission ("CSRC") and Asset Management Association of China ("AMAC") are the main industry regulatory authorities of RMB private equity investment funds. As an industry self-disciplinary regulation organisation, AMAC is fully responsible for all specific regulatory affairs of private equity investment funds and Managers under the supervisions of CSRC.

2) Regulatory Rules 

The core laws and regulations applicable to RMB private equity investment funds mainly include the Securities Investment Fund Law of the People’s Republic of China, Interim Measures for the Supervision and Administration of Privately offered Investment Funds, Several Provisions on Strengthening the Regulation of Privately Offered Investment Funds and several self-regulatory rules issued by AMAC.

3 Procedures of Establishment of RMB Private Equity Investment Funds 

The basic procedures of the establishment of an RMB private equity investment fund mainly include establishment of the Manager, registration of the Manager, fund raising and fund formation, and filing of the fund with AMAC.

1) Establishment of the Manager 

The Manager shall be established as a company or a partnership, and shall be registered with the competent market supervisory authority at the place where it is established. In most cases, before the aforesaid establishment, the Manager shall complete the prior approval/filing procedures with the local Provincial Bureau of Financial Regulation and Supervision or similar authority in order to be registered as an investment management enterprise.

2) Registration of the Manager 

a) Type of Manager 

As a precondition for conducting fund raising and management activities, the Manager shall be registered with AMAC after its establishment. The Manager may only select one of the following types as its institution type, and then manage RMB private equity investment funds of the corresponding type:

i. Private securities investment fund manager.

ii. Manager of Private equity investment fund and private venture capital investment fund.

iii. Manager of other private equity investment fund.

iv. Private asset allocation fund manager.

b) Registration Process 

The Manager shall satisfy the requirements of applicable laws and regulations on qualification conditions of Managers before applying for registration, which shall cover various aspects such as name, business scope, office, capital, actual controller, shareholders or partners, affiliates, employees, and officers of the Manager. The application procedures for registration of various types of private fund managers are approximately the same. The main application procedures are as follows:

i. The applicant engages a Chinese law firm to issue a legal opinion for the application of registration;

ii. The applicant prepares application materials and submits the application information online through the system designated by AMAC (the "AMBERS System");

iii. AMAC reviews the application materials submitted by the applicant and provides feedback (if any), the applicant provides supplementary replies;

iv. Based on the review results, AMAC will approve the application, suspend the application, or reject the application for registration.

It is worth noting that compared with general private securities investment fund managers, foreign invested private securities investment fund managers may have to meet some additional requirements in applying for manager registration.

3) Private Equity Investment Funds Raising and Establishment 

RMB private equity investment fund shall be raised by Managers in a non-public manner, and fundraising procedures with qualified investors shall be performed in accordance with applicable laws and regulations, including assessment of risk tolerance of investors, fund promotion, risk disclosure, signing of fund contracts and other procedures.

Limited partnership funds and corporate funds shall also register the fund entities with the market supervision and administration authority of the jurisdiction where they are registered. Contractual funds have no fund entity, and shall be declared to be established after the execution of the fund contracts and completion of the capital contribution by investors.

4) Filing of RMB Private Equity Investment Fund 

Within twenty business days after the completion of fundraising, the Manager shall apply for filing of the Fund by submitting filing application materials and filling in the fund's filing information through the AMBERS System. AMAC will review the application materials and give feedback (if any). The Manager will provide a supplementary reply, and AMAC will decide whether to approve the application, suspend the application, or reject the application for filing. Except for passive investment, the RMB private equity investment fund shall not conduct any other investment activities prior to completion of the filing procedures.

[1] Qualified Investors: refer to specific individuals, institutions or asset management products that meet the requirements of Interim Measures for the Supervision and Administration of Privately offered Investment Funds and other relevant regulations and possess the ability to identify and withstand risks.

如何在中国设立人民币私募基金 

前言：

本文所述的人民币私募基金指在中国大陆地区以非公开方式向合格投资者[1]募集资金、以进行投资活动为目的、资产由私募基金管理人所管理的投资载体。本文简要介绍人民币私募基金的监管概况和设立要点。

一、 人民币私募基金常见架构 

人民币私募基金包括有限合伙企业、公司及契约三种形式，其中投资一级市场的人民币私募基金多采用有限合伙形式。

有限合伙型基金应有且仅有一名管理人，并包括至少一名普通合伙人 (GP) 和一名有限合伙人 (LP)。GP可以为管理人或管理人关联方。管理人可从基金收取管理费，通常由普通合伙人取得绩效收益。

二、 人民币私募基金的监管 

（一） 监管机构 

中国证监会和中国证券投资基金业协会 (“基金业协会”) 为人民币私募基金的主要行业监管机构，其中，基金业协会作为行业自律组织，在中国证监会的授权下，全面负责私募基金及管理人的各项具体监管事务。

（二） 监管规则 

人民币私募基金适用的核心法律规范主要包括《中华人民共和国证券投资基金法》、《私募投资基金监督管理暂行办法》、《关于加强私募投资基金监管的若干规定》以及基金业协会发布的若干自律规范。

三、 人民币私募基金的设立流程 

人民币私募基金设立的基本流程主要包括管理人设立、管理人登记、基金募集及设立、以及基金产品备案。

（一） 管理人的实体设立 

管理人应以公司或合伙企业作为组织形式，在注册地市场监督管理局办理设立登记，多数情况下还需先办理注册地金融办或类似机构对管理人作为投资管理类企业的前置审批/备案手续。

（二） 管理人登记 

1、 管理人类型 

作为开展基金募集管理活动的前提条件，管理人于设立后应在基金业协会办理管理人登记。管理人仅可选择以下类型之一作为其机构类型，并管理对应类型的人民币私募基金：

（1） 私募证券投资基金管理人。

（2） 私募股权、创业投资基金管理人。

（3） 其他私募投资基金管理人。

（4） 私募资产配置类管理人。

2、 登记流程 

管理人于申请登记前应满足适用法律规范对管理人资质条件的要求，该等要求涵盖管理人名称、经营范围、办公场所、注册资本金、实际控制人、股东及关联方、人员及高管等各方面。各类型私募基金管理人的登记申请流程大致相同，主要申请流程如下：

（1） 聘请中国律师事务所就登记申请出具法律意见书；

（2） 管理人准备申请资料，并通过基金业协会指定系统 ("AMBERS系统") 线上填报申请信息；

（3） 基金业协会对管理人申请材料进行审核并反馈审核意见，管理人提供补充回复；

（4） 基金业协会根据审核结果，予以办理通过、中止办理或不予登记。

值得关注的是，含外资的私募证券投资基金管理人与一般私募证券投资基金管理人相比，其办理管理人登记可能还需符合额外要求。

（三） 人民币私募基金的募集设立 

人民币私募基金应由管理人非公开募集，并按照适用法律规范向合格投资者履行募集程序，包括对投资者的风险承受能力评估、基金推介、风险揭示、基金合同签署等环节。

有限合伙制及公司制基金还需在注册地市场监督管理部门办理基金实体的设立登记；契约型基金不存在基金实体，自基金合同签署并完成投资者出资后即宣告设立。

（四） 人民币私募基金的备案 

管理人应当在基金募集完毕后二十个工作日内通过AMBERS系统向基金业协会提交备案申请材料和填报基金备案信息，以申请办理基金备案，基金业协会将对备案申请材料进行审核并反馈审核意见，由管理人进行反馈，基金业协会最终做出办理通过、暂停备案或不予备案的核查结果。除实施现金管理外，人民币私募基金在办理完成备案手续前不得开展对外投资。

[1]合格投资者：是指符合《私募投资基金监督管理暂行办法》等规定的具备相应风险识别能力和风险承担能力的特定个人、机构或资管产品投资者。