By Sandra Lu | Lily Luo

Key Content of FAQ No. 13 and Its General Application to PFMs

FAQ No. 13 emphasizes the implementation of the principle of specialized management, i.e. when applying for PFM registration with AMAC, the applicant shall select only one institution type (机构类型) among “private securities investment fund manager”, “private equity / venture capital investment fund manager”, etc., and select a business type (业务类型) as its registered business type from those relevant and corresponding to its chosen institution type; a PFM shall only launch and file records of private funds that are consistent with its registered business type.

If there is indeed an actual long-term business need to operate multiple types of private fund management business, independent operating entities which satisfy the specialized management requirement should be established and each should apply to register as a PFM of a different type.

The chart below illustrates institution types for PFMs registration and business types corresponding to each institution type:

Impact on QDLP Fund Managers

On the premise of general application to PFMs of the principle of specialized management provided in FAQ No. 13, we would like to draw attention to its potential impact on a QDLP fund manager which is also classified as a PFM under the PRC laws.

• Existing QDLP Fund Managers

If a QDLP fund manager has been registered with multiple types of business in the old system, Private Fund Registration and Filing System (https://pf.amac.org.cn), it shall select only one institution type and its corresponding business type, and submit the application for the change of institution type and business type through Asset Management Business Electronic Registration System (https://ambers.amac.org.cn). 

Filing application for a new private fund will not be accepted until the change is confirmed. 

Once the institution type and business type is selected and confirmed, the existing QDLP fund(s) which are inconsistent with the selected business type shall not be open for any subscription or increase their scale of fundraising, and shall be liquidated or cleared after the expiration of the fund contract without any extension of the fund period. It will take more effort for a QDLP fund manager who has launched various types of QDLP funds to decide on which way to go and how to deal with the operation of the existing QDLP fund(s) which are inconsistent with the selected institution type and business type.

• QDLP Fund Managers in Progress

Under the principle of specialized management, the first and the subsequent private funds launched by a PFM shall be under the same business type. We note that there will be several newcomers to QDLP business in the near future. Some of them may plan to launch a QDLP private equity fund as their first fund, following QDLP securities investment funds, and/or other types of QDLP funds in the future, or vice versa. It is noteworthy that such business plan is no longer applicable subject to FAQ No. 13. QDLP fund managers in progress need to be more cautious when deciding on their institution type and business type, and design the first QDLP fund by taking into account the impact of FAQ No. 13.

2017年3月31日, 中国证券投资基金业协会发布了《私募基金登记备案相关问题解答(十三)》, 本所进行了翻译, 仅供参考。

AMAC issued FAQs Regarding Registration and Record-filing of Private Funds (No. 13) on 31 March 2017. We translate it into English for your reference.

私募基金登记备案相关问题解答(十三)

FAQs Regarding Registration and Record-filing of Private Funds (No. 13)

日期: 2017-3-31

Issuance date: 31 March 2017

问: 私募基金管理人在申请登记、备案私募基金时, 应当如何落实专业化管理原则?

Question: How should a private fund manager implement the principle of specialized management when it applies for the registration to become a private fund manager and the record-filing of a private fund?

答: 根据《私募投资基金监督管理暂行办法》第二十二条, 以及中国证券投资基金业协会《私募投资基金管理人内部控制指引》等相关自律规则, 为进一步落实私募基金管理人专业化管理原则, 切实建立有效机制以防范可能出现的利益输送和利益冲突, 提升行业机构内部控制水平, 私募基金管理人在申请登记时, 应当在“私募证券投资基金管理人”、“私募股权、创业投资基金管理人”等机构类型, 以及与机构类型关联对应的业务类型中, 仅选择一类机构类型及业务类型进行登记; 私募基金管理人只可备案与本机构已登记业务类型相符的私募基金, 不可管理与本机构已登记业务类型不符的私募基金; 同一私募基金管理人不可兼营多种类型的私募基金管理业务。

Answer: According to Article 22 of the Interim Measures for the Supervision and Administration of Private Investment Funds, Guidelines on the Internal Control of Private Fund Managers issued by Asset Management Association of China (“AMAC”) and other relevant self-disciplinary rules, for the purposes of further implementing the principle of specialized management by private fund managers, practically establishing effective mechanisms to prevent potential transfer of benefits and conflict of interests and improving the internal control of the institutions of the industry, when applying for private fund manager registration, a private fund manager shall only select one institution type from different types of institutions such as “private securities investment fund manager”, “private equity / venture capital investment fund manager”, etc., as its registered institution type, and select a business type as its registered business type from those relevant and corresponding to its chosen institution type; a private fund manager shall only file records of private funds that are consistent with its registered business type, and shall not manage private funds not consistent therewith; a private fund manager shall not concurrently operate multiple types of private fund management business.  

若私募基金管理机构确有经营多类私募基金管理业务的实际、长期展业需要, 可设立在人员团队、业务系统、内控制度等方面满足专业化管理要求的独立经营主体, 分别申请登记成为不同类型的私募基金管理人。

If a private fund management institution indeed has an actual long-term business need to operate multiple types of private fund management business, it may establish independent operating entities which satisfy the specialized management requirement in the aspects of the personnel and teams, business systems and internal control policies, etc., and these independent operating entities may each apply to register as a private fund manager of a different type. 

问: 已登记多类业务类型、兼营多类私募基金管理业务的私募基金管理人, 应当如何按照上述专业化管理要求进行整改?

Question: How should a private fund manager make amendments in accordance with the aforementioned principle of specialized management if it has already registered multiple business types with AMAC and is concurrently operating multiple types of private fund management business?

答: 截至目前, 已有2198家私募基金管理人通过协会“资产管理业务综合管理平台”(https://ambers.amac.org.cn), 遵循专业化管理原则, 完成登记备案。为协调统一行业自律管理标准, 在“私募基金登记备案系统”(https://pf.amac.org.cn)中已登记多类业务类型的私募基金管理人, 应当依照协会相关后续安排, 通过“资产管理业务综合管理平台”进行专业化管理事项的整改。

Answer: To date, 2198 private fund managers have already completed their registration and record-filing process through AMAC’s “Asset Management Business Electronic Registration System” (https://ambers.amac.org.cn) in accordance with the principle of specialized management. In pursuit of coherence with the unified industry standards of self-disciplinary management, a private fund manager which has registered multiple business types with AMAC through the “Registration and Record-filing System for Private Funds” (https://pf.amac.org.cn) shall, in accordance with the relevant follow-up arrangements made by AMAC, make amendments to specialize its management through the “Asset Management Business Electronic Registration System”.

此类私募基金管理人应当从已登记的多类业务类型中仅选择一类业务类型作为展业范围, 确认自身机构类型, 通过“资产管理业务综合管理平台”提交机构类型与业务类型变更申请, 以落实专业化管理原则。此类私募基金管理人须在完成机构类型与业务类型的变更确认之后, 方可提交新增私募基金备案申请。

A private fund manager as such should select only one business type from the multiple registered business types as its scope of business, confirm the type of institution it belongs to and submit the application for a change of institution type and business type through the “Asset Management Business Electronic Registration System” in order to implement the principle of specialized management. A private fund manager as such shall only submit an application for record-filing of a new private fund after the change of institution type and business type is confirmed.

针对此类私募基金管理人所管理的已备案且正在运作的存量私募基金, 若存在基金类型与管理人在“资产管理业务综合管理平台”所选择业务类型不符情形的, 在基金合同、公司章程或者合伙协议(以下统称基金合同)到期前仍可以继续投资运作, 但不得在基金合同到期前开放申购或增加募集规模, 基金合同到期后应予以清盘或清算, 不得续期; 同时协会将在相关私募基金公示信息中, 对此情形予以特别提示。此类私募基金管理人应就此事项向相关私募基金投资者及时做好信息披露, 维护投资者的合法权益。

Concerning the existing private funds under the management of such private fund managers which have been record-filed and are in operation, if the fund is inconsistent with the business type selected by the private fund manager in the “Asset Management Business Electronic Registration System”, the fund may carry on its investment operation before the expiration of the fund contract, the articles of association or the partnership agreement (hereby collectively referred to as the “fund contract”), but the fund shall not be open for any subscription or increase its scale of fundraising, the fund shall be liquidated or cleared after the expiration of the fund contract and the fund period shall not be extended; at the same time, AMAC will issue a special notice with regard to the situation of the fund in the public information of such private funds. A private fund manager as such shall promptly and properly disclose information regarding this issue to the relevant private fund investors to protect the investors’ legitimate rights and interests.