Recordal of private funds: Common issues and responses

The Methods for the Registration of Private Investment Fund Managers and the Recordal of Funds issued by the Asset Management Association of China (AMAC) specify that a private investment fund is required to make a record through the Private Fund Registration and Recordal System or the Comprehensive Asset Management Business Submission Platform, which came online on 6 September 2016, within 20 working days after completion of an offering. The authors propose to collate and analyze issues commonly seen in the records of private fund products from their cumulative experience in the private fund sector in recent years.

ACCURACY AND COMPLETENESS

The materials submitted by a manager are required to be accurate and complete, failing which the recordal application will be returned. When preparing these materials, the manager needs to examine whether the documentation to be submitted is consistent with the objective facts, whether it is consistent with the publicly registered information and whether it is consistent with other materials that are uploaded. For example: (1) all the recorded materials need to be signed and the signatures/seals and signature dates of all of the investors must be in order; and (2) the information in the recorded materials is required to be consistent with the information registered with the administration for industry and commerce (AIC).

Inconsistencies commonly seen in practice include: an inconsistency between the date of establishment of a fund constituted in the form of a partnership and the establishment date registered on the business licence of the partnership that serves as the medium for the fund; an inconsistency between the information on the partners of the fund and the information on the partners registered with the AIC by the partnership that serves as the medium for the fund; and the partnership agreement for the fund being the AIC version of a partnership agreement, which fails to reflect the relevant information required by the AMAC guideline version.

Chen Min and Lu Xili are partners of Boss & Young in Shanghai