Chapter I General Provisions

Article 1 In order to promote the healthy development of the private investment fund industry, standardize the private investment fund service business and protect the legitimate rights and interests of investors and relevant parties, these Measures are formulated in accordance with the Securities Investment Fund Law of People's Republic of China (PRC), the Interim Measures for the Supervision and Administration of Private Investment Funds and other relevant provisions.

Explanation:

1. The legal basis for directly regulating private equity funds is mainly the People's Republic of China (PRC) Securities Investment Fund Law and the Interim Measures for the Supervision and Administration of Private Equity Funds. At present, the Interim Measures for the Supervision and Administration of Private Investment Funds are being revised and will be promulgated in the form of the Measures for the Supervision and Administration of Private Investment Funds, which belongs to the nature of the State Council's departmental regulations; At the same time, the State Council's "Private Placement Regulations" at the level of administrative regulations has also been included in the 20 16 legislative plan and is being promoted.

2. People's Republic of China (PRC) Securities Investment Fund Law not only clarifies the regulation and operation rules of private equity funds at the legislative level, but also authorizes China Foundation to carry out industry self-discipline under the guidance of CSRC. On this basis, the self-discipline management of China Foundation has become an important part of the private equity fund management system.

Judging from the information disclosed at present, the framework of self-discipline rules proposed by the China Foundation has basically taken shape, showing a "7+2" pattern with 7 methods and 2 guidelines. Namely, Measures for the Registration and Fund Filing of Private Investment Fund Managers (released in June 20 14), Measures for the Administration of Information Disclosure of Private Investment Funds (released in February 20 16), Measures for the Administration of Private Investment Fund Raising (released in April 20 16), and Measures for the Administration of Private Investment Fund Managers Engaged in Measures for the Administration of Private Equity Fund Services (this draft for comments), Measures for the Administration of Fund Qualification (being formulated), Guidelines for Internal Control of Private Equity Funds (released on February 20 16) and Guidelines for Private Equity Fund Contracts (20 16).

Obviously, the "Measures for the Administration of Private Investment Fund Services" solicited this time is an important part of the self-discipline rules system.

Article 2 Scope of Application These Measures are applicable to private fund managers entrusting private fund service institutions (hereinafter referred to as service institutions) to provide private fund services such as fund raising, investment consultancy, asset custody, share registration, valuation accounting, information technology systems, etc. These Measures shall apply to the service institutions, private fund managers and private fund custodians that provide private fund services to participate in private fund services.

Private fund managers shall entrust the service institutions that have completed the registration in China Asset Management Association (hereinafter referred to as the Association) and become members of the Association to provide private fund services. The relevant provisions for private fund managers to entrust service agencies to engage in private fund raising business and investment consulting activities shall be formulated separately by the Association. Service institutions participating in fund asset custody shall abide by the relevant provisions of the self-discipline rules for private equity investment fund custody.

Explanation:

1. According to this method, private fund managers are allowed to entrust service agencies to provide outsourcing services, including fund raising, investment consultants, asset custody, share registration, valuation accounting and information technology systems. In fact, from the perspective of large business sectors, it includes four parts: fundraising, investment, custody and custody.

2. This method clarifies the basic conditions that an outsourcing service organization should have, namely, "to become a member of the China Foundation Association upon completion of registration+completion".

3. Issuance and investment are regulated by the promulgated Issuance Measures and the Investment Measures which are being perfected respectively, and the provisions of these two special rules shall be followed.

4. The "Measures" stipulate that "these Measures shall be applicable to service institutions to carry out private equity fund services, private equity fund managers and private equity fund custodians to participate in private equity fund services." This embodies two particularly important requirements, namely: 1) Private placement managers should abide by these Measures when entrusting third parties to provide outsourcing services; 2) Private placement managers shall carry out the services described in these Measures by themselves and abide by these Measures. This means: 1) Unless otherwise specified, the administrator can complete the services listed in the Measures by himself or entrust a third-party service agency to provide services; 2) The standards and rules for managers to provide services by themselves or by entrusting a third party are unified.

5. Clearly put forward the concept of "custody business" for the first time, which has never appeared before in these Measures and is an established system; The method clarifies the basic rules for participating in fund custody business, that is, "it should comply with the relevant provisions of the self-discipline rules for private fund custody business", and the author will continue to analyze it below.

Article 3 Service agencies Rights and obligations Service agencies and their employees engaged in private equity fund services shall abide by relevant laws, regulations and industry norms, be honest, trustworthy, diligent and conscientious, guard against conflicts of interest, protect the property safety of private equity funds and safeguard the legitimate rights and interests of investors in accordance with service agreements, operation memoranda or other legal texts recognized by all parties. Service institutions shall not subcontract the promised private equity fund services or subcontract them in disguised form.

Article 4 The fund property involved in private equity fund services shall be independent of the self-owned property of the service institution. When a service institution goes bankrupt or liquidates, the fund property involved in private equity fund services does not belong to its bankruptcy property or liquidation property.

Explanation:

Articles 3 and 4 put forward several important requirements: first, prevent conflicts of interest; Second, subcontracting is prohibited; Third, make the fund property independent.

Article 5 Rights and Obligations of the Manager When a private equity fund manager entrusts a service institution to carry out business, it shall formulate a corresponding risk management framework and system, formulate an implementation plan for business entrustment according to the principle of prudent operation, and determine the scope of entrusted services appropriate to its operating level.

Private fund managers should conduct due diligence on service institutions before entrusting them to provide services, and learn about their personnel reserves, business isolation measures, software and hardware facilities, professional ability and credit status. And sign a written service agreement with the service organization to clarify the rights and obligations of both parties and the liability for breach of contract. Private fund managers should continue to pay attention to and regularly evaluate the operational capacity and service level of service institutions.

Where a private equity fund manager entrusts a service organization to provide private equity fund services, it shall not be exempted from the responsibilities that the private equity fund manager should bear according to law.

Explanation:

This paper puts forward several requirements for managers to entrust outsourcing services:

1, improve the risk management and system control of outsourcing business, and the scope of outsourcing services should be adapted to the management level of managers.

2. Before the manager entrusts a service institution to provide service business, it shall conduct due diligence on the service funds; And should continue to pay attention to and regularly evaluate the operational capacity and service level of service organizations.

3. Private placement managers are not exempted from their legal responsibilities due to entrustment.

Article 6 Industry self-regulatory associations shall conduct self-regulatory management of service institutions and their private equity fund services in accordance with laws, regulations and self-regulatory rules.

Chapter II Private Equity Fund Services

Article 7 Scope of Service Business A private equity fund manager may entrust a service institution to engage in one or more service businesses as stipulated in Article 2 of these Measures. For a single private fund product, the private fund manager shall at least perform one of the functions of fund raising and investment management.

Explanation:

This article stipulates that "the private placement manager shall at least perform one of the functions of fund raising and investment management", which means that fund raising and investment management are defined as two essential functions of the private placement manager. If you can't have it at the same time, the private equity manager will lose the value of existence.

Article 8 Definition of raising service Raising service refers to recommending funds for private fund managers, selling fund shares (rights and interests), and handling subscription/subscription (subscription), redemption (withdrawal) and other business activities of fund shares (rights and interests).

Article 9 Definition of Asset Custody Service Asset custody service refers to providing services such as account management, clearing and delivery, and custody of property certificates for private equity fund managers.

Explanation:

1, the Securities Investment Fund Law requires that publicly offered funds must be managed; Private equity funds must be managed, unless otherwise agreed in the fund contract. This means that for private equity funds, if the fund contract does not stipulate management, it can not be managed.

For private equity funds, there is no mandatory requirement to manage equity funds. The Interim Measures for the Supervision and Administration of Private Equity Investment Funds stipulates that "unless otherwise agreed in the fund contract, private equity funds shall be managed by the fund custodian."

2. In fact, custody is an effective institutional arrangement to ensure the independence of fund property and the safety of investors' funds. Through custody, the fund property is under the supervision or management of a third-party service organization (such as the custodian) from fund establishment, investment management and project withdrawal; For securities funds, the rights and interests formed by fund property investment can usually be registered with Deng Zhong company. This ensures that the fund funds can form a closed loop, and the moral hazard of managers misappropriating, embezzling or even defrauding investors' funds is effectively controlled.

In view of the fact that custody is not mandatory, for equity funds, the equity certificates of their investment cannot be registered and inquired in Deng Zhong companies in a unified way like securities investment. In this context, detention has become an effective system supplement.

3. Custody services include providing account management, clearing and delivery, property voucher custody and other services for private equity fund managers. Managers can hand over property certificates (such as investment agreement, register of shareholders, articles of association of the invested enterprise, etc.). ) By investing equity funds in the custody of third-party service organizations, it not only reduces its own staffing, but also makes the certificate management more standardized due to the involvement of third-party professional organizations.

4. With regard to the requirements of service institutions providing custody business, the Measures stipulate that service institutions that have obtained the qualification of fund custody business according to law with the approval of the China Securities Regulatory Commission or completed the registration of fund share registration service in the Association may engage in asset custody business.

Article 10 Definition of fund share registration service Fund share registration service refers to providing private fund managers with services such as fund share registration, transfer, custody and settlement.

Article 11 Definition of fund valuation accounting service Fund valuation accounting service refers to providing fund accounting, valuation and related information disclosure services for private fund managers.

Article 12 Definition of information technology system service Information technology system service refers to providing private equity fund managers, private equity fund custodians and other service institutions with private equity fund business core application systems, information system operation and maintenance, security and other services. Among them, the core application systems of private equity fund business include sales system, investment transaction management system, share registration system, fund settlement system and valuation accounting system.

Explanation:

This paper sorts out and defines the contents of the core application system of private equity fund business, including sales system, investment transaction management system, share registration system, fund settlement system and valuation accounting system.

Article 13 The definition of supporting services refers to providing private equity fund managers with services such as regulatory data submission, fund performance analysis, personnel dispatch, business training for senior managers and practitioners.

Chapter III Registration of Service Organizations

Article 14 The registration of a service institution by a risk warning association does not constitute the recognition of the business qualification and continuous compliance of the service institution, nor does it serve as a guarantee for the safety of the fund property. If a service organization fails to carry out fund service business for six consecutive months after the registration of the Association, the Association will cancel its registration.

Fifteenth institutions required to be registered with the China Securities Regulatory Commission and obtain the qualification of fund sales services can engage in private fund raising business. Service institutions that have obtained the qualification of fund custody business according to law with the approval of China Securities Regulatory Commission or completed the registration of fund shares in the Association may engage in asset custody business. Service institutions that have completed the registration of fund valuation accounting services in the Association may engage in auxiliary services.

Explanation:

Articles 14 and 15 clarify the following issues: 1. Establish a withdrawal mechanism for service organizations, that is, if the association fails to carry out fund service business for six consecutive months after completing registration, the association will cancel its registration; 2. Clarify the specific conditions for service agencies to provide fund-raising services, custody services and auxiliary services.

Article 16 An institution applying for registration of private equity fund shares, fund valuation accounting services and information technology system services shall meet the following conditions:

(1) It is in good operating condition, and the paid-in capital of the institution providing private equity fund share registration service and information technology system service is not less than 50 million yuan;

(2) The corporate governance structure is perfect and the internal control is effective;

(3) Its business is standardized, and it has no record of major violations of laws and regulations in the last three years, and there are no major issues such as litigation and arbitration;

(4) The organizational structure is complete, with a dedicated service business team and senior managers in charge of service business, which can ensure the integrity and independence of business operation, and the service business team has a fixed place and safety precautions to meet business needs;

(five) equipped with corresponding software and hardware facilities, with safe, independent, efficient and stable business technology systems, all systems have completed business networking tests including data backup platforms designated by the fund industry association;

(six) the person in charge of the private equity fund service department and the legal representative of the independent third-party service institution shall obtain the qualification of fund practice. All employees shall obtain the qualification of fund practice within 6 months from the date of engaging in private equity fund service business, and participate in follow-up practice training;

(seven) the applicant shall assess whether there is a conflict of interest in the business, and set up the corresponding firewall system;

(8) The applicant's information technology system complies with laws and regulations, the provisions of the China Securities Regulatory Commission and the Association and relevant standards, and has established risk management systems and disaster backup systems such as network isolation, safety protection and emergency treatment;

(9) An institution applying for information technology services shall have the qualifications stipulated by the relevant state departments or obtain relevant qualification certification, have experience in similar application services, and have all the personnel, equipment, technology, intellectual property rights and good records of safe operation required for conducting business;

(ten) other conditions stipulated by the association.

Article 17 Registration materials The materials submitted by the institution applying for registration include but are not limited to:

(a) the letter of commitment of honesty and law-abiding;

(two) internal control management system, business isolation measures and emergency plans;

(3) Information system configuration and system operation test report;

(four) the establishment of the private equity fund service business team, the provisions of job responsibilities and the basic situation of the competent leaders, business leaders, business personnel and other personnel;

(5) A list of service contracts or intentional cooperation agreements signed with the private equity fund manager to stipulate the rights and obligations of both parties;

(six) involving the collection of settlement funds, it shall include the relevant account information, the explanation materials of the security mechanism of raising and selling settlement funds, and the test report of the data backup platform designated by the association;

(7) Legal opinions;

(8) A business plan for developing the private equity fund business;

(nine) other materials stipulated by the association.

Explanation:

1, Articles 17 and 18 put forward specific requirements on the conditions that institutions providing private equity fund share registration services, fund valuation accounting services and information technology system services should meet and the materials that should be provided for registration.

It should be emphasized that this kind of registration requires legal advice. The author personally believes that this is related to the "registration system" of registration. Article 14 of the Measures stipulates that "the registration of service organizations by the Association does not constitute the recognition of service organizations' business qualifications and continuous compliance, and does not serve as a guarantee for the safety of fund property", which means that, like the registration of private placement managers, the registration of service organizations by the China Foundation follows the idea of "registration system". Under the concept of registration system, the registration authority does not make substantive judgments or make administrative licenses; But set the registration conditions, and those who meet the conditions will sign up. Whether it meets the requirements is judged by an intermediary agency (such as a law firm).

3. Under the idea of registration system, the responsibility of law firms that express opinions that meet the registration conditions will increase, and a mechanism of investigation and accountability will be formed. This kind of accountability may not only be subject to self-regulatory measures and administrative penalties, but also be investigated for civil liability by investors.

Eighteenth registration materials are incomplete or do not meet the requirements, the association will inform all the contents that need to be corrected at one time. If the registration materials submitted by the service organization are complete and meet the requirements, the association shall issue a registration letter within 2 months from the date of acceptance.