At present, there is no corresponding legal norm for private placement. At present, we are based on the Partnership Enterprise Law (preparing for limited partnership private placement, which has not yet been implemented), the Trust Law (trust provides a legal way for private placement, which is a unique form of private placement funds in China) and the Contract Law (which is the main legal basis for contractual private placement).

Private equity fund companies, for the CSRC, are only regulated by ordinary institutional investors or even natural person investors. As long as they want to escape this kind of supervision, there is a way. The flexibility of private placement is the biggest advantage, but proper supervision is necessary. Any flexibility, if it causes market chaos and stock price manipulation, is illegal.