Global Trustee and Fiduciary Services News and Views Issue 50

Global Trustee and Fiduciary Services News & Views | Issue 50 | 2018 103 6. The privately raised fund business of the privately raised fund manager Privately raised fund managers refers to non-financial institutions that have registered with the Asset Management Association of China (AMAC) in accordance with the Securities Investment Fund Law, and that conduct the management business of privately raised funds that invest in securities, equity and debt. The privately raised fund manager is regulated and supervised by the CSRC. However, its business does not belong to the asset management business of the “financial institution” as stipulated in the New Asset Management Rules. The aforementioned asset management businesses of various types of financial institutions have existed for more than 10 years. However, the privately raised fund business started to develop in 2014. And by the end of 2017, the existing balance of privately raised funds reached RMB11.1 trillion (USD 1.62 trillion). 10 The New Asset Management Rules stipulate that “special laws and administrative regulations governing privately raised funds are applicable to privately raised funds. But when specific provisions in the said special laws and administrative regulations are silent on this, the present Opinions shall be applicable . . .”. As the State Council is considering formulating administrative regulations regulating the business of private raised funds, the New Asset Management Rules have not yet been fully applicable to the business of privately raised funds. The specific business of privately raised funds is subject to the self-disciplinary regulation of the AMAC. We note that there are signs that AMAC is gradually restricting privately raised fund business in accordance with some provisions of the New Asset Management Rules. On 19 August 2018 the public consultations on the above detailed rules were closed. The transition period for the new regulations extends to the end of 2020, from a previously announced 30 June 2019 deadline. This is to give financial institutions enough time to make necessary adjustments. Such rules are expected to be officially promulgated and implemented in the near future. For now, the New Asset Management Rules and its corresponding rules have 1 On 20 July 2018, Measures for the Supervision and Administration of Wealth Management Business of Commercial Banks (Draft for Comments) was issued by CBIRC, and Measures for the Administration of Privately-raised Asset Management Business of Securities and Futures Business Institutions (Draft for Comments) as well as Provisions on Administration of Privately-raised Asset Management Schemes Operation of Securities and Futures Business Institutions (Draft for Comments) were issued by CSRC. 2 http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/ 3529600/index.html. Link here . 3 http://www.cbrc.gov.cn/chinese/newShouDoc/047621B36C0 D4D09A3BBA50907C0AD63.html http://www.csrc.gov.cn/ pub/zjhpublic/zjh/201807/t20180720_341673.htm. Link here . 4 As the detailed rules for insurance asset management product has not been promulgated yet and subject to the limit on the length of this article, such asset management business will not be discussed. 5 “The Annual Report on the Wealth Management Market of the China Banking Industry (2017)” issued by the Wealth Management Registration and Custodian Centre of the China Banking Industry. 6 “Comments on the Development of China’s Trust Industry in 2017” issued by the China Trustee Association. 7 Sina Finance ( http://finance.sina.com.cn/trust/ xtplyj/2018-05-31/doc-ihcffhsv7953771.shtml). Link here . 8 “Publicly Raised Fund Market Data” published on the website of the AMAC. 9 “Statistical Annual Report on the Privately Raised Asset Management Business of the Securities and Futures Operating Institution 2017” published by the AMAC. 10 “Overview on the Post-filing of Privately Raised Funds in 2017” published by the AMAC. gradually and clearly outlined a new system for the asset management businesses in China. It can be expected that significant changes will occur. Sandra Lu Partner Llinks Law Offices