1
The Development Background of Private Equity Fund
Private equity fund is a new force in China's wealth management industry. It belongs to a "financial institution" that performs the functions of a financial institution to some extent, but has not issued a financial license. But it is also an important member of shadow banking to evade financial supervision and carry out regulatory arbitrage. For private equity funds, the regulatory policy has been dynamically adjusted according to the economic development situation, financial risk situation, national financial policy orientation and industry development. From the perspective of industry development and supervision, the development of private equity fund industry can be divided into the following stages:
The first stage: the era of chaos. The promulgation of the Partnership Enterprise Law in 2006 confirmed the legal relationship of limited partnership, and also opened the curtain for the development of private equity industry. Private equity funds mostly raise funds by issuing limited partnership shares, and some banks also break through the scale limit by consignment. In the era of rapid economic growth, the private equity industry is quietly developing and growing. The biggest feature of supervision in this era is the dispute between NDRC and CSRC. The National Development and Reform Commission first confirmed the de facto regulatory power of the industry through the Notice on Promoting the Standardized Development of Equity Investment Enterprises, but the CSRC also put forward various requirements for private equity funds because of the regulatory function of securities investment. Policy conflicts between the two are common, and fund managers are often at a loss. The Securities Investment Fund Law was revised in 20 12, and the CSRC tried to bring private equity funds into its supervision scope, but it aborted because of the opposition of the National Development and Reform Commission.
The second stage: the era of filing system and voluntary system. In 20 13, the central office issued the Notice on the Division of Responsibilities for Private Equity Fund Management, which made it clear that the CSRC was responsible for the supervision and management of private equity funds, and the main body of private equity supervision officially landed with the CSRC. Since February 7, 20 14, the CSRC has authorized the fund industry association to officially carry out the registration of private fund managers, filing of private funds and self-discipline management, which has opened a new era of filing management of fund industry associations. This period is called "the spring of private placement development". By the end of 20 16 and 1, there were 2,584 registered private equity fund managers and 2,546 registered private equity funds, with a subscription scale of 5.34 trillion yuan and a paid-in scale of 4.29 trillion yuan, with 389,900 employees in the private equity industry, making it an indispensable part of the wealth management industry.
The third stage: the post-filing system era. With the rapid development of private equity fund industry, there are also various problems in this industry, such as distortion of registration information, incomplete and untrue registration information, and untimely update; Fund-raising behavior is illegal, raising funds from unqualified investors, and illegally protecting capital and income; Illegal investment operation, misappropriation and occupation of fund property, and transfer of benefits; The company's management is out of order, and the conflict of interest prevention mechanism has been established or the implementation is not in place; The information disclosure system is not perfect and the information disclosure is not sufficient; Illegal investment, market manipulation, insider trading, etc. In this context, China Securities Regulatory Commission and Fund Industry Association have successively issued the Announcement of China Fund Industry Association on Further Regulating the Registration of Private Equity Fund Managers and the Measures for the Administration of Private Equity Fund Raising, which have increasingly strict filing requirements for the private equity fund industry, more standardized investment management and more specific internal control requirements.
1
The supervision of the main body has become stricter.
After the CSRC took over the supervision of private equity funds, on the one hand, it broadened investment channels and removed institutional obstacles, on the other hand, it vigorously strengthened supervision and cracked down on illegal activities, trying to adapt a miscellaneous army that was outside the policy into a regular army with standardized investment behavior and internal governance compliance. In the face of all kinds of chaos in filing, the fund industry association issued the "Announcement on Further Regulating the Filing of Private Equity Fund Managers", which put forward stricter requirements for the filing of private equity funds:
1. Require fund managers to put on record, and fund management institutions that have not put on record may not raise funds. According to the Administrative Measures for Raising Private Investment Funds issued in April, 20 16, only private fund managers registered with fund industry associations and institutions registered with China Securities Regulatory Commission and becoming members of China Fund Industry Association can engage in private fund raising, and no other institution or individual can engage in private fund raising. That is, unregistered private fund management institutions cannot raise funds by themselves, and private placement filing has entered a mandatory stage. [ 1]
2. Product issuance requirements are normalized, and registered private equity fund managers who fail to file products in time will be deregistered. 2065438+February 2006, the Fund Industry Association issued the Announcement of China Fund Industry Association on Further Regulating the Registration of Private Equity Fund Managers, stipulating that newly registered private equity fund managers have not filed the first private equity fund product within 6 months from the date of completing the registration procedures. Private fund managers who have been registered for 12 months without filing the first private fund product 20 1 May 6 1 Private fund managers who have been registered for less than 12 months without filing the first private fund product 201August 6/kloc-.
3. The daily submission requirements are strict, and institutions that fail to submit information on time will be included in the list of abnormal institutions. Private fund managers shall timely fulfill the obligation to submit and update quarterly, annual and major information of private fund managers and private funds managed by them through the private fund registration and filing system. If the company fails to fulfill its quarterly, annual and major information reporting and updating obligations on time twice, it will be listed as an abnormal institution by China Fund Industry Association. In addition, private fund managers should fill in the annual financial report audited by accounting firms through the private fund registration and filing system every year. If the audited annual financial report is not submitted as required, the China Fund Industry Association will suspend the acceptance of the application for filing private equity products of the institution and include it in the list of abnormal institutions. The China Fund Industry Association will also refuse to register institutions that have newly applied for registration of private fund managers for one year, but have not submitted audited annual financial reports.
4. Newly established institutions should have legal opinions, which reduces the moral hazard of fund industry associations. In case of any major change of the newly registered private equity fund manager, the legal opinions issued by China Law Firm shall be submitted through the private equity fund registration filing system. At present, the registration of private equity funds by fund industry associations is not subject to substantive examination before doing anything. In fact, there are a lot of concealment, omission or even false statements, and fund industry associations face high moral hazard when handling registration. Requiring lawyers to issue legal opinions is helpful to improve the information quality and compliance of application materials, improve the efficiency of association registration and reduce the work pressure of fund industry associations.
5. Strict corporate governance. From 2065438 to February 2006, the fund industry association successively issued the Guidelines for Internal Control of Private Fund Managers and the Administrative Measures for Information Disclosure of Private Funds, which put forward stricter requirements for corporate governance, internal control and information disclosure of private funds.
6. Senior management qualification, the main senior management personnel need to pass the qualification examination of the fund. Fund managers engaged in private securities investment fund business, and their senior management personnel (including legal representative \ executive partner (appointed representative), general manager, deputy general manager, compliance \ risk control person, etc.). ) should obtain the qualification of fund practice. All kinds of private fund managers engaged in non-private securities investment fund business shall have at least two senior executives who have obtained the qualification of fund practice, and their legal representatives \ executive partners (appointed representatives) and compliance \ risk control leaders have obtained the qualification of fund practice. Moreover, the compliance/risk control leaders of various private equity fund managers are not allowed to engage in investment business.
[1] The above provisions only involve the fundraising behavior, and the financial advisory behavior has not yet required compulsory filing.
2
Encourage the development and strengthening of behavior supervision
In the aspect of behavior supervision, on the one hand, fund industry associations actively broaden the investment channels of private equity funds and clear the institutional obstacles for their development. On the one hand, it also strictly supervises its fund-raising and investment to prevent financial risks.
1. Actively broaden the investment channels of private equity funds. One is to allow private equity funds to open accounts in the name of products. 2065438+In March 2004, Deng Zhong Company issued the Notice on Issues Related to Opening Accounts and Settlement of Private Investment Funds, stipulating that private investment funds can directly open securities accounts in the name of private investment fund products. Previously, when private equity funds entered the securities market, they needed to open securities accounts in the name of companies or partnerships or borrow trust companies. After private equity funds directly open accounts with products, it will be beneficial to realize the sunshine entering the market, reduce operating costs and promote the standardized development of the private equity fund industry.
Secondly, private equity funds are allowed to enter the inter-bank bond market. 2065438+May 2005, the central bank issued the Notice of the Financial Markets Department of the People's Bank of China on Relevant Matters Concerning Private Equity Funds' Entry into the Inter-bank Bond Market, which stipulated that private equity funds meeting certain conditions could enter the inter-bank bond market, thus opening the door to the inter-bank bond market for private equity funds.
Third, private equity funds are allowed to participate in the trading of fixed-income products. 2065438+June 2005, Shenzhen Stock Exchange made it clear that private investment funds registered with fund industry associations can participate in the trading of all listed and listed fixed-income products in Shenzhen Stock Exchange, further clearing the investment obstacles of private investment funds.
Fourth, private equity funds are allowed to invest in insurance companies. In April of 20 13, China Insurance Regulatory Commission issued the Notice of China Insurance Regulatory Commission on Relevant Issues Concerning Regulating Limited Partnership Equity Investment Enterprises to Invest in Insurance Companies, allowing qualified limited partnership equity investment enterprises to invest in Chinese insurance companies, laying a foundation for private equity funds to enter the insurance industry.
Finally, insurance companies are allowed to set up private equity funds. From September 2065438 to September 2005, the China Insurance Regulatory Commission issued the Notice of China Insurance Regulatory Commission on Relevant Matters Concerning the Establishment of Insurance Private Equity Funds, allowing insurance companies to set up growth funds, merger and acquisition funds, emerging strategic industry funds, mezzanine funds, real estate funds, venture capital funds and parent funds with the above funds as the main investment targets, so as to further bind and integrate the insurance and private equity industries.
2. Strengthen the supervision of private equity funds. First of all, it is clear that the share of private equity funds shall not be split and transferred. The Measures for the Administration of Private Fund Raising Behavior clearly stipulates that raising financial products with private fund shares or their income rights as investment targets, or illegally splitting and transferring private fund shares or their income rights, shall not break through the standard of qualified investors in disguise. This move is mainly aimed at a large number of wealth management products that split and transfer the share of private equity funds in the Internet financial platform. The above products may have to be rectified or disappear directly because of violation of this clause.
Secondly, the introduction of fundraising regulators. The Measures for the Administration of Raising Behavior of Private Investment Funds stipulates that a special raising supervision institution shall be set up in the process of private placement. The regulators of fund-raising can only be Deng Zhong companies, commercial banks, securities companies that have obtained the qualification of fund sales business and other institutions stipulated by China Fund Industry Association. The establishment of a fund-raising supervision institution system is equivalent to setting an invisible threshold and excluding some private equity funds with poor qualifications.
Third, the requirements for fundraising behavior are more stringent. For the first time, the Measures for the Administration of Raising Behavior of Private Investment Funds clearly stated that "expected income", "expected income" and "predicted investment performance" should not be publicized during publicity, and it was first proposed that products should not be publicized in WeChat circle of friends.
Fourth, set a cooling-off period. The Measures for the Administration of Raising Behavior of Private Investment Funds provides investors with a cooling-off period of not less than 24 hours, during which the raising institutions shall not actively contact investors. Investors have the right to terminate the fund contract before confirming the successful return visit of the fundraising institution.
Fifth, set the longest validity period of the assessment. The Measures for the Administration of Raising Behavior of Private Investment Funds stipulates that the validity period of investor evaluation results shall not exceed 3 years at the longest. When the fund-raising institutions recommend private equity funds to investors again after the deadline, it is necessary to re-evaluate the risks of investors. Investors who have held the same private placement product for more than 3 years do not need to conduct investor risk assessment again.
Finally, standardize the responsibility of private equity funds to sell on a commission basis. The Measures for the Administration of the Raising Behavior of Private Investment Funds clearly stipulates that private fund managers shall bear the fiduciary responsibility of the fund contract and fulfill the obligations of the trustee, and shall not be exempted from the responsibilities they should bear according to law because of the entrusted raising. The fundraising agency is responsible for all aspects of private equity fund raising, such as the determination of specific targets, the appropriateness of investors, publicity and promotion, and the confirmation of qualified investors.
four
Give full play to the role of industry self-discipline
Adequate punishment means is a necessary means to ensure that administrative actions achieve good results. As an industry self-regulatory organization, fund industry associations also strive to find a breakthrough point and play a role in industry self-regulatory management, compliance and self-regulatory inspection, and penalties for violations.
1. Establish an abnormal institution handling system. The fund industry association shall establish a publicity system for "lost (abnormal)" private placement institutions. For private fund managers under certain circumstances, the fund industry association shall publicize it in official website, record it in the credit files of relevant institutions as appropriate, and report it to the CSRC.
2. Set the filing threshold to form factual access. According to reports, after the announcement on further standardizing the registration of private fund managers was released, the pass rate of new managers was only 10%. There are a large number of non-specialized businesses in the business scope, such as private lending, P2P, guarantee, business consulting and so on. Institutions in which there are conflicts of interest in business scope, the qualifications of senior managers do not meet the requirements, the system construction is insufficient, and the internal control system has plagiarism are excluded from the filing threshold. Through the compulsory filing and filing review system, the fund industry association officially put its teeth on its power.
3. The CSRC will check the normalization. In 20 15, the CSRC conducted on-site inspections on more than 40 private fund managers and private fund sales organizations in/kloc-0, and took administrative supervision measures on 27 private fund managers, 2 private fund sales organizations and 8 responsible persons, giving full play to the role of administrative inspection and improving the deterrent power of supervision.