NDRC private equity executive moves to CSRC

According to 21st Century Business Herald, details have yet to be disclosed regarding Liu's respective duty and scope of responsibility in the CSRC.

Private equity was included in the draft Securities Investment Funds (SIF) Law released at the end of last year, opening the door for the CSRC to play a regulatory role alongside the NDRC. Although fierce lobbying saw specific references to the asset class removed, the CSRC was been awarded jurisdiction over "sunshine funds" - capital raised from private sources to invest in listed stocks.

In February, the securities regulator issued its own draft guidelines for sunshine funds and went so far as to invite private equity firms to raise mutual funds, taking them outside the private placement space. The NDRC promptly nixed the plan, reminding private equity managers they are prohibited from running retail funds and investing in publicly traded securities.

The SIF Law comes into effect on June 1, and according to last amendment, the NDRC remains private equity's primary regulator with responsibility for non-public investment funds, while the CSRC will oversee public market activity.

A source familiar with the situation told AVCJ that the State Council is aware of tensions between the two regulators - and the uncertainty it is fostering among industry participants - and is trying to coordinate a mutually acceptable solution. Liu's appears to be part of these efforts.

"It's too early to reach the conclusion that the CSRC will gain more power as a result of this move and become the ultimate regulator for the industry," said Vincent Huang, a partner at fund-of-funds Pantheon and a founder of the Limited Partner Association of China. "However, it leaves door open for such possibility."

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