1. The People's Republic of China (PRC) Securities Investment Fund Law requires that the fund custodian can only be a commercial bank with a custody license;

2. The custodian bank will exercise the function of keeping funds, or audit the occurrence and use of things that investors lose money after the fund company goes bankrupt;

3. To put it bluntly, it is to prevent fund companies from running;

4. The Bank is a fund custodian bank responsible for fund management and supervision.

The characteristics of private equity funds:

1, the return on equity investment is very rich. Unlike debt investment, which receives a certain percentage of interest income from invested capital, equity investment receives dividends from the company's income according to the proportion of capital contribution. Once the invested company is successfully listed, the profit of private equity investment fund may be several times or dozens of times;

2. Equity investment is accompanied by high risks. Equity investment usually needs to go through several years of investment cycle, and because it is invested in developing or growing enterprises, the development risk of the invested enterprises themselves is very high. If the invested enterprise ends in bankruptcy, the private equity fund may lose all its money.

3. Equity investment can provide all-round value-added services. Private equity investment not only injects capital into the target enterprise, but also injects advanced management experience and various value-added services, which is also a key factor to attract enterprises. While meeting the financing needs of enterprises, private equity investment funds can help enterprises improve their management ability, expand procurement or sales channels, integrate the relationship between enterprises and local governments, and coordinate the relationship between enterprises and other enterprises in the industry. All-round value-added services are the highlight and competitiveness of private equity investment funds.

Legal basis:

Article 4 of the Interim Measures for the Supervision and Administration of Private Investment Funds

Private fund managers and institutions engaged in private fund custody business (hereinafter referred to as private fund custodians) manage and use private fund property, institutions engaged in private fund sales business (hereinafter referred to as private fund sales institutions) and other private fund service institutions engaged in private fund service activities shall fulfill their duties and fulfill their obligations of honesty, credibility, prudence and diligence.

Private equity fund practitioners shall abide by laws and administrative regulations, and abide by professional ethics and codes of conduct.

Article 5 The China Securities Regulatory Commission and its dispatched offices shall, in accordance with the Securities Investment Fund Law, these Measures and the China Securities Regulatory Commission.