Recordal work for private funds begins under CSRC oversight

In June 2013, the State Commission Office for Public Sector Reform made it clear that private investment funds are subject to the oversight of the China Securities Regulatory Commission (CSRC). As the CSRC failed to issue relevant regulations in the more than six months that followed, the recordal of private funds in fact came to a standstill.

As authorised by the CSRC, the Asset Management Association of China (AMAC) issued the Measures for the Registration of Managers of Private Investment Funds and Fund Recordal (for Trial Implementation) [2014] No. 1 on 17 January 2014. Implementation of document No. 1 began on 7 February 2014, signifying the official commencement of registration and recordal of private funds under the CSRC regulatory regime. Our concise analysis of the regulatory approach contained in document No. 1 follows.

Nature of recordal

Under document No. 1, the recordal of private funds is not an administrative permission matter, but rather industry self-regulation that has information disclosure at its core, and good faith as its foundation. The AMAC will not conduct a substantive before-the-fact review of the information of a private fund that is placed on the record, but this does not mean that the recordal of private funds is not important.