The first administrative regulations of China's private equity fund industry are on the ground to clarify the private equity industry norms.Industry insiders believe that regulations help prevent financial risks, and also show that China is working hard to guide capital inflow into entities, support venture capital markets that are more related to scientific and technological innovation, and stimulate the spirit of entrepreneurship in the sluggish economy.

Chinese Prime Minister Li Qiang Sunday (July 9) signed the State Council Order to announce the regulations on the supervision and management of private equity investment funds and implement it on September 1.

According to the reporter issued by the China Securities Regulatory Commission that day, the drafting idea of the regulations is to maintain financial security, to play the role of private equity funds to serve the real economy, support scientific and technological innovation, and define the bottom line of supervision, to different types of private equity fundsImplement differentiated supervision.

The Regulations have a total of 7 chapters and 62 articles, and the content is mostly confirmed by the provisions and policies that have been implemented in the existing financial industry, regulations and policies.The private equity practitioners interviewed believed that it is worth noting that the measures to prevent financial risks in the regulations and the encouragement of the entrepreneurial investment fund.

At the level of risk control, the regulations clarify that private equity funds need to conduct standardized information disclosure, and also clarify that the securities regulatory agency has the right to investigate and obtain evidence and seal, and also have the right to enforce law enforcement operations such as compulsory auditing and receiving private equity funds.

The

Regulations also specifically proposed that private equity fund managers must not require local governments to promise to repurchase principal and other methods to increase government hidden debt in disguise.

When private equity funds invest in urban investment platforms with government credit endorses, they often ask the government to promise to guarantee investment income.Such transactions seem to be equity investment, but they are debt.

A private equity fund manager in Shanghai told Lianhe Zaobao that such behavior prohibits such acts from increasing hidden debt of local governments and reducing financial risks, but it also means that local governments have less financing channels.

In terms of encouraging entrepreneurial investment, the regulations have set up special chapters of venture capital funds to make differentiated supervision arrangements that are different from other private equity funds.The regulations point out that entrepreneurial investment funds engaged in long -term investment, value investment, and transformation of major scientific and technological achievements provide convenience in investment withdrawal, and encourage, support and guide the entrepreneurial investment fund to "invest early, invest in small, investment technology".

Industry insiders: Officials have begun to attach importance to the role of private equity on innovation technology

Industry insiders pointed out that the planning of China's private equity regulatory regulations for many years, and the landing at this time shows that the Chinese government has begun to attach importance to the role of private equity on innovation technology.

Jia Junxin, chairman of Shenzhen Xinheng Lida Capital Management Co., Ltd., said in an interview with Lianhe Morning Post that global investment slowed down, and China's foreign trade, consumption and investment indicators declined.Economy and support for entrepreneurial innovation play a more active role.

He said that the core of the regulations is to lead the funds to the real economy; at the same time, "starting with the entrepreneurial investment in the first -level market will help activation of entrepreneur spirit and restore market confidence."

practitioners also pointed out that most Chinese companies have received private equity support before listing, guiding private equity funds to flow towards entities and high -tech enterprises, which can increase quality from upstream, increase the proportion of secondary market science and enterprises, and increase the performance of the stock market.

A reporter from the CSRC mentioned that there are currently 220,000 private equity funds in China, with a management scale of 21 trillion yuan (about S $ 3.91 trillion).Nearly 90 % of the science and technology board listed companies have received support for private equity funds before listing.The statement also said that private equity funds have played a positive role in supporting the national strategy, such as investing in semiconductors, to promote economic development and entrepreneurial employment.