Unless otherwise agreed in the fund contract, the private equity fund shall be managed by the fund custodian, and the private equity fund manager shall establish and improve the selection and appointment system of the private equity fund custodian to effectively ensure the safety of funds.

If the fund contract stipulates not to manage private equity funds, the private equity fund manager shall establish institutional measures and dispute resolution mechanisms to ensure the property safety of private equity funds.

According to Article 21 of the Guidelines for Internal Control of Private Investment Fund Managers

At present, there is no mandatory custody requirement for private placement in laws and regulations, that is to say, if the fund contract stipulates custody, it needs to be managed by the fund custodian;

If you don't choose custody, you need to establish institutional measures and dispute resolution mechanisms in the contract to ensure the property safety of private equity funds.

Note that although there is no requirement for private equity fund custody, according to the data, a considerable number of private equity funds have chosen custody. By the end of June this year, China Foundation had registered private fund managers 19709. Of the 66,649 registered private equity funds that have been issued, 48 136 private equity funds have chosen the custody mechanism, accounting for 72.22%. In other words, more than 70% of registered private equity funds choose custody.