Private equity is not illegal. However, private equity must be raised from qualified investors and may not be raised from units or individuals other than qualified investors. It must not be publicly promoted or promoted, and it cannot promise no loss of principal or minimum returns.

Legal Basis

Article 2 of the "Interim Measures for the Supervision and Administration of Private Investment Funds"

The term "private investment funds" (hereinafter referred to as "private funds") as mentioned in these Measures is Refers to investment funds established within the territory of the People's Republic of China by raising funds from investors in a non-public manner.

The investment in private equity funds includes the purchase and sale of stocks, equities, bonds, futures, options, fund shares and other investment targets stipulated in the investment contract.

Article 11

Private equity funds shall raise funds from qualified investors, and the cumulative number of investors in a single private equity fund shall not exceed the provisions of the Securities Investment Fund Law, Company Law, Specific amounts specified by laws such as the Partnership Law.

Article 14

Private fund managers and private fund sales agencies shall not raise funds from entities or individuals other than qualified investors, and shall not raise funds through newspapers, magazines, radio stations, televisions, or the Internet. Promote and promote to unspecified targets through other public media or through lectures, reports, analysis meetings, notices, leaflets, mobile phone text messages, WeChat, blogs, and emails.

Article 15

Private fund managers and private fund sales agencies shall not promise investors that the investment principal will not be lost or promise minimum returns.