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CSRC Improves Regulatory Requirements for Managers of Publicly Offered Funds

Mon, 04 Jul 2022
Categories: China Legal Trends

Recently, China Securities Regulatory Commission (CSRC) revised the “Administrative Measures for Securities Investment Fund Management Companies” (证券投资基金管理公司管理办法) and renamed it as the “Administrative Measures for Supervising Managers of Publicly Offered Securities Investment Funds” (公开募集证券投资基金管理人监督管理办法, hereinafter referred to as the “Measures”).

The Measures aims to strengthen the supervision over managers of publicly-offered securities investment funds. As China’s publicly-offered securities investment funds have developed rapidly over the years, the number of their managers has also increased. That’s why the CSRC hopes to strengthen its supervision over these fund managers.

On 20 May 2022, the CSRC officially issued the Measures and complementary rules.

According to the Measures and complementary rules, the supervision over fund managers will cover the whole chain of “access - internal control - operation - governance - exit - supervision.”

In terms of access, the Measures improves the establishment conditions for fund management companies and their shareholders, completes the negative list for shareholders with less than 5% ownership, and strengthens the financial soundness requirements for non-major shareholders with more than 5% ownership.

The Measures also allows professional asset management institutions such as securities management subsidiaries, insurance management companies and wealth management subsidiaries of banks within the same group to apply for public offering licenses.

In terms of exit, the Measures establishes an exit mechanism for managers of publicly offered funds. Through the mechanism, the fund management companies that fail in business operations can proactively apply for deregistration of the qualifications for management of publicly offered funds or achieve market-oriented exit through mergers and acquisitions.



Cover Photo by JuniperPhoton on Unsplash

Contributors: CJO Staff Contributors Team

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