What are the risks of raising private equity funds?

First, raise the main body. Only two institutions can engage in private fund raising activities: institutions that register private fund managers with China Fund Industry Association can raise their own private funds; An institution registered with the China Securities Regulatory Commission and qualified for fund sales business, and becoming a member of China Fund Industry Association, may accept the entrustment of private fund managers to raise private funds. Other institutions and individuals may not engage in fundraising activities of private equity funds.

Second, fund-raising institutions. Raising institutions and their employees shall not engage in illegal activities such as misappropriating fund property and clients' funds, and trading by using undisclosed information related to private equity funds.

Third, private fund managers. Fulfill the obligations of the trustee and assume the fiduciary responsibilities of the fund contract, articles of association or partnership agreement. Where a fund sales agency is entrusted to raise private equity funds, the private equity fund manager shall not be exempted from the responsibilities that should be borne by the law because of the entrusted raising.

Fourth, the supervisory body. The regulatory agency shall become a member of China Fund Industry Association, effectively supervise the special account for raising and settlement funds in accordance with the provisions of laws and regulations and the agreement on account supervision, and bear joint and several responsibilities for ensuring the transfer safety of raising and settlement funds of private equity funds.

No institution or individual may, for the purpose of evading the standard of qualified investors, raise financial products with private equity fund shares or their income rights as investment targets, or illegally split and transfer private equity fund shares or their income rights, thus breaking through the standard of qualified investors in disguise. Investors shall make a written commitment to buy private equity funds for themselves, and no institution or individual may buy private equity funds for the purpose of illegal split and transfer.