China's NDRC seeks tighter grip on private equity

The NDRC urged local authorities to register all private equity funds with more than RMB500 million ($80.5 million) in assets no later than the end of June. An October 2012 deadline set last May has not been met, the NDRC said in the statement. It noted that the process had stalled in some areas of the country.

The Chinese government has said in the past private equity funds should register with NDRC. However, they are not strictly required to do so.

While the NDRC is currently responsible for renminbi-denominated private equity funds, the CSRC has been encroaching upon its territory to introduce similar assets disclosure and risk control requirements with an aim for investor protection.

Last month, the securities regulator issued draft rules that impose greater oversight on domestic private equity funds. The rules require PE and VC firms - and also "sunshine funds" that invest privately raised capital in public companies - would be required to register with the Asset Management Association of China (AMAC). The organization is sometimes known as Securities Investment Fund Industry Association and has close ties to the CSRC.

To meet the criteria for registration, funds must have at least RMB10 million ($1.6 million) in paid-up capital; be managed by two licensed individuals plus a risk control officer; have no record of illegal activity or adverse credit in the last three years; and have investment exposure to publicly issued securities with a value of at least RMB100 million.

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• Topics
• Greater China
• Regulation
• Renminbi fund
• China
• CSRC
• NDRC
• regulation