The Era Of Private Franchise Is Coming.

The era of private-sector franchise has finally arrived in the upgrading of rules and filing systems.

The Fund Industry Association (hereinafter referred to as the China Foundation) announced that from April 5th, all private equity managers should submit their applications for registration of managers and record private placement funds through their new system "asset management business integrated management platform". The original information in the registration system of private equity funds will also directly migrate to the new system, while the original private placement system will no longer be used.

In the new system, private placement agencies will also follow the issue of the relevant questions and answers (thirteen) of the registration of private equity funds issued by the China Association for basic research (March 31st).

In the eyes of the industry, this requirement reflects the principle of "good quality and bad quality" for private placement supervision, which is another supplement to the "7+2" self regulatory system at the executive level, and will further regulate the investment and operation of private equity organizations.

"From the beginning of last year to the present, the tightening of private placement regulation is an irreversible trend. The continuous" public collection "of private placement is obviously a purification to the industry, which is a positive attitude that every manager should face.

A head of a private institution close to the regulator said in Beijing.

For a long time, the phenomenon of different types of private equity funds such as equities and securities operated by the same manager is not uncommon.

"In order to emphasize management ability, large managers are more willing to demonstrate a whole chain of business structure.

The extension is made in the two tier market, while the paction is stared at the primary market.

In March 31st, an investment manager of a private equity firm in Beijing said.

"There are even a lot of non equity issuing shares, which has always been the concern of regulators."

But the above phenomenon will stop abruptly with the new rules of the China Association for basic cooperation.

The above regulatory questions and answers require that when applying for registration, a private entity should register only one type of institution and type of business in the type of private equity investment fund manager, private equity, venture capital fund manager and other types of business corresponding to the type of institution.

At the same time, private placement institutions can only record private equity funds that are consistent with the types of registered businesses of the institution, and can not manage private equity funds which are not in conformity with the types of registered business of this institution.

In fact, the mixed operation of the same manager in the one or two level private placement product is indeed easy to hide compliance defects and moral hazard.

"Mixed operation really needs to be curbed, for example, equity products intend to talk about mergers and acquisitions with listed companies, while private equity securities buy profits in the two tier market."

The above investment manager said, "this phenomenon is also a new self regulatory system should be resolved."

In the regulatory questions and answers, China Foundation association also corroborated the necessity of private sector implementing classified management. It pointed out that the aim of the measure is to "further implement the principles of specialized management of private equity fund managers, and effectively establish effective mechanisms to guard against possible pmission of interests and profits, and enhance the level of internal control of industrial organizations."

According to the reporter from a number of large private management department was informed that as early as this year, some agencies have been interviewed by regulatory authorities, asking them to put forward corresponding corrective solutions to different types of private placement problems.

"At that time, we could not communicate with the regulatory authorities in accordance with the new regulations, so we began to carry out the corresponding product pformation and improvement at the end of February, and adjust the shareholding structure of the company."

"Of course, the company will have two different categories," said the head of a large private equity firm in Beijing.

Moreover, on the basis of compliance and risk isolation, there is room for this system. "

In fact, the above Q & A also reserved a certain space for the cross operation of different types of private businesses, but it is necessary to apply separately for the new private managers' record qualifications and ensure the isolation of teams and internal control mechanisms.

"If the private equity fund management institution does have the actual and long-term development needs for managing many types of private equity fund management business, it can set up independent business entities that meet the professional management requirements in personnel team, business system, internal control system, etc., and apply for registration as private managers of different types respectively."

China Foundation said.

In April 5th, the China Association for the second time released a new notice on the private placement system, announcing that the new private filing platform, the "asset management business integrated management platform", will go into operation on the second stage and the original system will be discontinued.

This is another rigid constraint to implement private placement monopoly.

"Before the new system and the old system are running at the same time, but the old system has been shut down this time, equivalent to the new system's pformation, and now, after the new system is formally put into operation, this requirement will have a clear practical significance."

A partner of a private equity firm in Shanghai said, "because the organizations that fail to meet the standards may not be able to record products under the new system."

In accordance with the requirements of the China Association for basic operations, after April 5th, "managers' registration applications and record private equity funds continue to update managers' information and private equity fund operation information as required, as well as to apply for membership of the association and registration of employees." all of them need to be carried out in the new system.

In the new system,

The institution can only choose one item from the registered business type as the scope of exhibition industry.

"This means that the private sector must define the scope of business on the system registration."

The partners said, "in fact, some private organizations did not fill in the first batch of records and fill in according to the new requirements."

According to the relevant arrangement of the new system, if the private placement agency fails to submit a change application on the type and type of business, it will not submit a new application for private equity fund filing.

This means that the clarity requirement of private placement classification will be bound with the rights of new products.

"In order for the new product to be released normally, private placement agencies will generally meet the new filing requirements as soon as possible."

The partners mentioned above.

The official responsible for the private sector, which is close to the regulatory authorities, said that the pformation of the new filing system is not only aimed at better classified supervision of private equity funds, but lies in further implementing the "7+2 private self regulatory rules system" put forward by the regulators.

"Classified supervision is only part of the" 7+2 "private self regulatory system. The new system will put forward higher requirements for private placement institutions in the aspects of information disclosure, investment and operation standardization, while requiring managers to make up the relevant materials on the stock products.

The person in charge said.

"This is the baptism and purification of the private sector, and it is also a necessary process for the private-sector industry to become regularized and to protect investors' rights and interests."

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