To better protect investors and foster innovation, China announced regulations for the $2.9 trillion private investment fund industry on Sunday.
According to a statement from China’s securities regulator and the justice ministry, the new regulations, which Premier Li Qiang signed and became effective on Sept. 1, include a chapter expressly for venture capital funds as part of officials’ efforts to stimulate investment in cutting-edge technological start-ups.
The duties of fund managers and custodians, fundraising, determining risk levels, monitoring venture capital funds, and general management and supervision are all covered under the core rules.
Private investment funds with various organizational forms, such as contracts, companies, and partnerships, are subject to extensive rules. Private equity and publicly traded securities are both acceptable investments for private investment funds in China.
According to a statement from the State Council obtained by the state-run Xinhua news agency, the regulations consist of 62 articles divided into seven chapters.
According to the announcement, 22,000 private investment managers had signed up with the Asset Management Association of China as of May and were in charge of managing 153,000 funds totaling around 21 trillion Yuan.
