Beijing suspends domestic PE registrations
The Beijing government has suspended domestic private equity investment registrations in relation to suspected illegal fundraising.
Asset managers have been unable to register new investment activities since January 9, according to local media. Any proposed activities involving the wording such as project investment, equity investment, investment management, investment consultancy and advisory, capital management, asset management and financial leasing have been banned.
The 21st Century Business Herald confirmed the news with the Beijing Administration for Industry and Commerce. The report cited industry sources that the suspension is related to illegal fundraising activity from private investors, such as through the online peer-to-peer (P2P) lending platforms. Asset management houses tend to serve as offline guarantors for those platforms.
Chinese regulators have recently tightened controls over domestic private equity. A few weeks ago, the China Securities Regulatory Commission (CSRC) suspended listings and fundraising by domestic PE on the National Equities Exchange and Quotation (NEEQ) system, also known as the New Third Board. The securities regulator said it would investigate the use of the proceeds raised by listed GPs.
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