Basic structure of contractual funds
Figure 1: the basic structure of contractual funds Private placement funds initially appeared as "sunshine private placement" in the mode of trust and investment. After about 10 years of development, it was not until the amendment of the Securities Investment Fund Law on June 20 13 that the legal basis for contractual private equity funds was given for the first time. From the perspective of the evolution of regulatory policies, there are mainly the following four development stages:
● Before the revision of the Securities Investment Fund Law, private equity funds must be established by trusts and brokers in the form of "companies" and "limited partnerships".
● 2065438+June, 2003 1 day, the implementation of the new Securities Investment Fund Law: non-publicly raised funds are included in the scope of supervision; Three organizational forms of private equity funds are defined: contractual, corporate and partnership, which lays a legal foundation for contractual private equity funds.
● 2065438+February 7, 2004 Implementation of the Measures for Registration and Filing of Private Equity Fund Managers (Trial): The establishment of private equity fund management institutions and the issuance of fund products are clearly registered and filed, without administrative approval. Private equity funds have changed from "guerrillas" to "regular troops".
● 2065438+August 22nd, 2004, the Interim Measures for the Supervision and Management of Private Equity Funds was implemented: the full-caliber registration and filing system of private equity funds and the principle of moderate supervision were clarified, the negative list system was explored, and the supervision framework of contractual private equity funds was further clarified.
Due to the characteristics of marketization and flexibility, contract funds have developed rapidly since the promulgation of the Interim Measures for the Supervision and Management of Private Investment Funds. Compared with corporate and partnership private equity funds, it has the following characteristics:
Comparison of Three Private Equity Funds
Figure 2: Comparison of three types of private equity funds Compared with corporate and partnership private equity funds, contractual funds have the main advantages that the number of qualified investors can reach 200, and the funds do not act as taxpayers (actually do not pay taxes). However, contractual private placement does not have the qualification of independent legal person, and it needs to be realized through nested limited partnership in private placement or mergers and acquisitions.
Comparison of Contractual Private Placement with Trust Plan and Asset Management Plan
Figure 3: Compared with trust plan and asset management plan, contractual private placement has more advantages in the number of investors than trust. However, compared with trust plans and asset management plans, contract funds also have three obvious disadvantages. First, it is impossible to register shares directly because it does not have the qualification of an independent legal person. Secondly, without a financial license, you can't lend directly; Finally, because the relevant qualifications have not been released, I cannot be an ABS manager.
The Establishment, Issuance and Operation Structure of Contractual Private Equity Fund
The main participating institutions of contractual funds
The main participating institutions of contract funds include: fund managers, fund custodians, fund sales organizations and other private placement service organizations.
Fund managers must have related subjects;
● Private equity funds can be managed by a third-party custodian, and the fund contract can also stipulate that private equity funds should not be managed, but the institutional measures and dispute resolution mechanism to ensure the property safety of private equity funds must be clearly defined in the fund contract;
● In terms of private equity fund sales institutions, fund managers can sell by themselves or entrust institutions with corresponding legal qualifications to sell;
● Other private service organizations include service outsourcing organizations that provide services for funds, including share registration and fund valuation, and such work can also be undertaken by fund managers themselves.
Two. Contractual private placement process (1) private placement fund registration and filing process
Basic issuance process of contractual private placement
Figure 4: Basic issuance process of contractual private placement
The fund manager shall go through the registration formalities in advance and complete the registration of the fund industry association after the fund raising is over.
● Fund registration: the fund manager submits the registration application to the Association through the private placement fund registration and filing system, and the Association will go through the registration formalities through the website publicity within 20 working days after receiving all the registration materials.
● Fund filing: The fund manager shall file through the private equity fund registration and filing system within 20 working days after the private equity fund is raised. The materials submitted include: main investment direction, fund category, fund contract, entrusted management agreement (if entrusted management is adopted), custody agreement (if custody is established) and other materials stipulated by the fund industry association.
● Registered private equity funds can apply to open securities-related accounts and start product operation.
(2) The basic process of contractual fund operation.
In the actual operation process, while designing the fund contract and raising funds, it is also necessary to select a custodian or related work to ensure the subsequent fund settlement and valuation accounting.
The basic process of contractual fund operation
Figure 5: Basic flow of contractual fund operation
three
Design and operation framework of contractual fund products
(1) single investment fund
The so-called "single" here refers to a contractual private equity fund with a relatively simple issuance structure and directly composed of managers, custodians and investors. It is more common in the market.