Regarding the development prospects of the private equity industry, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, has clarified the direction of reform.
At the recent symposium on the "Regulations on the Supervision and Administration of Private Equity Investment Funds" (hereinafter referred to as the "Private Fund Regulations"), Fang Xinghai pointed out that it is necessary to take the promulgation and implementation of the regulations as an opportunity to comprehensively and systematically sort out the rules and regulations of private equity funds, and coordinate the use of "legislative regulations" Reform, abolish, explain and compile" and other methods, further strengthen the construction of supporting basic systems for the industry, revise the current rules and regulations in a timely manner, promptly issue supporting implementation rules, fully implement the authorization clauses in the regulations, and strive to initially form scientific and complete content, clear and coordinated systems within this year , Run an efficient and transparent rule system.
At the same time, expand the fundraising channels of private equity funds and further strengthen the investment force of private equity funds. Enrich sources of funds, gradually expand the introduction of long-term funds such as insurance funds, social security funds, and pensions; promote the improvement of tax policies, and form a tax-neutral system and incentive mechanism in line with industry characteristics; strengthen data governance, and promote information disclosure, electronic contracts, and share registration and other infrastructure construction; strengthen investor education, cultivate the concepts of rational investment, value investment, and long-term investment; broaden exit channels, and promote a virtuous cycle of "investment-exit-reinvestment".
Special legislation at the highest level in the private equity industry
Fang Xinghai said that from the start in 2013 to the review and approval and promulgation and implementation in 2023, it took ten years to formulate the private equity regulations. The promulgation of the private equity regulations is an important measure to implement the decision-making and deployment of the Party Central Committee. The private equity regulations institutionalize and legalize the relevant decision-making measures of the Party Central Committee, marking that my country's private equity fund industry has entered a new stage of development. The implementation of the regulations will surely enhance the credibility and attractiveness of the industry, give full play to the important role of private equity funds in direct financing, and have important and far-reaching significance for helping the reform and development of the capital market, serving the real economy and supporting technological innovation.
Fang Xinghai emphasized that the introduction of private equity regulations is an urgent need to further consolidate the legal foundation of the industry. For a long time, the private equity fund industry has faced the problems of insufficient supply of laws and regulations, relatively weak system construction, low industry entry barriers, insufficient interim and ex-post supervision methods, and insufficient administrative penalties, which have led to some institutions' lack of compliance and risk control awareness and professionalism. The level of operation needs to be improved, and violations of laws and regulations and risks occur from time to time, especially some high-impact risk cases, which seriously damage the image and reputation of the industry. The Private Equity Regulations bring all types of private equity funds into a legalized and standardized track, providing a strong legal guarantee for the standardized development and effective supervision of the private equity industry.
Fang Xinghai pointed out that the introduction of private equity regulations is an important guarantee for the high-quality transformation and development of the industry. At present, the management scale of my country's private equity fund industry has exceeded the 20 trillion mark, ranking among the top in the world. Some leading institutions stand out, and their professional capabilities are improving day by day. And continue to improve. At present, the industry is in an important transition period from "quantity growth" to "quality improvement". As the highest level of special legislation in the private equity industry, the Private Equity Regulations have consolidated the institutional foundation of the industry, which is conducive to better protecting the legitimate rights and interests of investors and promoting the healthy development of the industry. Under the protection of private equity regulations, the private equity industry will surely open a new chapter of high-quality development.
There are seven highlights in the private placement regulations
Fang Xinghai said that in accordance with the requirements of stimulating the vitality of the industry, gathering market momentum, strengthening internal constraints, and promoting healthy development, the regulations have made regulations in terms of market access, business development requirements, registration and filing, fundraising, investment operations, supervision and management, and responsibility allocation. A series of institutional arrangements mainly present seven highlights.
The first is to confirm the legal status and functional role of private equity funds through administrative regulations. In the current transition stage of high-quality development of the private equity fund industry, the introduction of the regulations is a full affirmation of the industry's development achievements in the past ten years, and it is also a further confirmation of the legal status of private equity funds at the level of administrative regulations. In the general provisions of the regulations, it is clearly stated that "the state encourages the healthy development of the private equity industry, and plays a role in serving the real economy and promoting scientific and technological innovation." .
The second is to clarify that the registration and filing system is a beneficial exploration of the management model of private equity funds. Under the framework of the Fund Law, the regulation specifies that private equity fund managers need to be registered, and that private equity funds should be filed after the fundraising is complete. of. Based on the fact that private equity funds have financial business and financial product attributes, but the manager has not been identified as a financial institution at this stage, combined with the characteristics of private equity funds that have high requirements for managers, a series of negative lists and positive ones have been formulated. Continuous operation requirements ensure that managers have corresponding professional capabilities, which is not only conducive to consolidating the institutional basis and regulatory framework for the standardized development of private equity funds, but also ensures that their operations have the power and vitality they deserve.
The third is to set behavioral norms for various market entities. In response to the outstanding problems in the private equity industry, the regulations focus on key entities such as managers, shareholders, actual controllers, and partners, focus on key links such as fund raising and investment operations, strengthen the behavioral norms of relevant entities, and strengthen risk management and control. Guide the healthy development of the industry. It clarifies the integrity and diligence obligations of private equity fund managers, and lists the statutory duties that should be performed. Adhere to the bottom line of "non-public" and "qualified investors" fundraising behaviors, implement penetrating supervision, and strengthen investor suitability management. Make institutional arrangements for professional management and related party transaction management, prevent conflicts of interest and transfer of interests, and strictly prohibit violations of laws and regulations such as guaranteeing principal and income, using undisclosed information for transactions, and misappropriating fund assets.
The fourth is to improve the market-oriented restraint mechanism. The surname of private equity funds is "private". The regulations firmly grasp the characteristics of private equity funds' contract freedom, market self-discipline, and self-responsibility. In response to the "difficult exit" problem faced by the industry, market-based exit arrangements are provided to provide institutional guarantees for the benign exit of private equity funds and the protection of investors' rights and interests. Efforts should be made to establish a mechanism for binding the interests of private equity fund managers and senior managers to "bind" the interests of shareholders, practitioners, and investors, so as to prevent managers from "walking away" after risks arise. Strengthen information provision and information submission requirements, improve the authenticity, accuracy and completeness of information submission and disclosure, and prevent moral hazard and adverse selection caused by information asymmetry.
Fifth, create a favorable business environment for development. The regulations focus on solving a number of shackles and stubborn diseases that hinder the development of the industry, and are a "talisman" for optimizing the environment and promoting development. It provides a legal basis for solving the problem of the name registration of contractual funds' foreign investment, implements the independence requirements of fund properties, forms an external publicity effect, makes the external investment of contractual private equity funds well documented, and solves investors' worries. The regulation stipulates that it is necessary to establish a sound monitoring mechanism for private equity funds and build a unified information platform to make it possible to collect information such as electronic contracts, product process information, and investor share holdings, which is conducive to consolidating the industry's operating infrastructure and improving the efficiency of private equity fund operations. Security and transparency.
Sixth, implement differentiated supervision on venture capital funds. The regulations set up a special chapter to support the development of venture capital funds, and formulated special regulations that combine unity and differentiation, and coordinate regulatory rules and promotion policies. Considering that venture capital funds, as a special type of private equity fund, are different from other funds in terms of investment scope, investment strategy, leverage application, and duration, etc., the regulations stipulate that venture capital funds should be subject to differentiated supervision and self-discipline management. Provide more convenience in other aspects, attract more funds to "invest in small, early, and technology", and smooth the virtuous circle of "technology-industry-finance".
The seventh is to strengthen supervision during and after the event. The regulation has enriched regulatory measures and law enforcement means, systematically set up legal responsibilities, clarified the market access prohibition system, and greatly increased the punishment for violations of laws and regulations. The deregistration mechanism for private equity fund managers is clarified, and managers who do not have the conditions for business development and are suspected of serious violations of laws and regulations are deregistered, which provides a legal basis for the continuous clearance of "false, inferior and chaotic" private equity funds, and is the foundation for building an industry of "orderly entry and exit, survival of the fittest" Ecologically important measures. These regulations will have a very positive effect on deterring violations of laws and regulations, punishing "black sheep", maintaining industry order, and purifying the market environment.
Strengthen the infrastructure construction of private equity, expand the fund-raising channels of private equity funds
Fang Xinghai pointed out that it is necessary to promote the formation of a good situation in which market players strictly abide by the law and regulatory agencies regulate law enforcement.
The first is to do a good job in the publicity and education of laws and regulations. The study, publicity and implementation of regulations should be regarded as a key task for the whole industry at present and for a period of time in the future, comprehensively carry out various, practical and effective law popularization and training and learning activities, and promote the formation of the law study, understanding, law-abiding, and usage. A good atmosphere will make the spirit and concept of the regulations deeply rooted in the hearts of the people, ensure that the institutional arrangements of the regulations will take root, and lead the various tasks of industry reform and development to a deeper level.
The second is to promptly carry out a comprehensive cleaning and reconstruction of rules and regulations. It is necessary to take the promulgation and implementation of the regulations as an opportunity to comprehensively and systematically sort out the rules and regulations of private equity funds, and make overall plans to use methods such as "revision, abolition, interpretation and compilation" to further strengthen the construction of the industry's supporting infrastructure. It is necessary to regard this year as a key year for the construction of the rule of law in the industry, closely follow the main line of "building a system", revise the current rules and regulations in a timely manner, promptly issue supporting implementation rules, fully implement the authorization clauses in the regulations, and strive to initially form a scientific and complete, The system is clear and coordinated, and the rules system operates efficiently and transparently.
The third is to expand the fundraising channels of private equity funds and promote the high-quality development of the industry. Taking the implementation of private equity regulations as the starting point, we will work with all parties to optimize the industry's development environment, break through the pain points and blockages in all links of "fundraising, investment, management and exit", and further strengthen the investment power of private equity funds. Enrich sources of funds, gradually expand the introduction of long-term funds such as insurance funds, social security funds, and pensions; promote the improvement of tax policies, and form a tax-neutral system and incentive mechanism in line with industry characteristics; strengthen data governance, and promote information disclosure, electronic contracts, and share registration and other infrastructure construction; strengthen investor education, cultivate the concepts of rational investment, value investment, and long-term investment; broaden exit channels, and promote a virtuous cycle of "investment-exit-reinvestment".
The fourth is to strengthen administrative supervision and self-discipline management to effectively protect the legitimate rights and interests of investors. Investors are the foundation of the industry, and the protection of the legitimate rights and interests of investors must always be the starting point and goal of regulatory work. Regulatory departments should make full use of relevant regulations, promote regulatory concepts, methods and means to keep pace with the times, continuously improve the ability and level of classified supervision and continuous supervision, and urge industry organizations and practitioners to make timely rectification according to standards, consciously abide by the law, and earnestly Safeguard the legal rights and investment confidence of investors. The fund industry association should give full play to the functions of "self-discipline, service, bridge, and innovation", continue to deepen the reform of registration and filing, focus on improving the quality and efficiency of self-discipline management, and continuously optimize the service level of the industry. For more stock information, follow Caijing365!