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"Private equity fund raising behavior management approach
(Trial) (draft) "drafting notes
A drafting background
"Private investment fund supervision and management of Interim Measures" (hereinafter referred to as "Interim Measures") since the enactment of the promotion of all types of private equity funds (hereinafter referred to as private equity funds) regulate the development of health plays a very important role. According to the "Interim Measures" provisions of Article XVI, private equity fund managers can act on its own sales of private equity funds and private equity fund sales commission sales organization in two ways, by the China Securities Investment Fund Association (hereinafter referred to as China's fund industry association) in accordance with different Features category of private equity investors to develop the ability to identify risk and affordability questionnaire and risk disclosure guidelines and format of the book. Accordingly, in order to strengthen the protection of the legitimate rights and interests of private equity investors, to further standardize the market to raise private equity fund, China fund industry association in recent years private equity funds of various phenomena in the process of recruitment, study and summarize the issues on the basis of the development the "private equity fund raising behavior management approach (trial) (draft)" (hereinafter referred to as "conduct recruitment approach", this approach), to the public for comments, to be in the form of industry self-regulation rules promulgated.
(A) private equity funds to raise the status quo
Development of the private equity industry grows, the risk of an accumulation of risk exposure incident after another. As of November 2015, China's fund industry association co settles 143 (times) alleged breach of private cases. The main types of illegal performance relates to publicity, false propaganda, guaranteed insurance benefits, to raise funds to non-qualified investors, illegal fund-raising, illegal deposits from the public and so on.
1, publicity or propaganda disguised public
In association handle discipline cases, complaints and the process of administrative docking cases, we found some agencies open or disguised public to promote its private equity fund products, mainly through the company's website, micro-channel public number of staff calls and other means of publicity Available Private fund products.
2, false propaganda
Private equity funds during the marketing campaign of false propaganda mainly in the following three aspects:
(1) private equity fund raising to institutional investors confuse administrator role
Private equity fund managers entrusted to banks, securities companies and other institutions to raise funds for its use of bank, securities company's customer resources to achieve rapid fund raising products. Since the sale of impulse or other unknown reasons, the staff fund sales institutions often did not have any investment management relationship between the Fund and the Fund sales organization products facts disclosed to investors. Once private equity investors appear honor crisis or other problems, the truth is often unknown to the sales organization to seek explanation, confusing the role of fund managers and fund sales organization.
(2) false propaganda Important information
Some recruitment agencies and their staff at the time of the existence of false propaganda to publicize and promote the phenomenon of private equity funds, depositories such as the fictional, imaginary security agencies, fictional law firms, accounting firms, investor confidence in the use of such institutions to achieve rapid purpose raised.
(3) to ensure protection of the revenue to lure investors
Recruitment agencies and their staff in the publicity and promotion of private equity funds to ensure no loss of principal, fixed income and other promising ways to induce investors to invest in the fund contract income distribution section that read, "expected return", "expected income", etc. words, so that investors mistakenly think that they purchased private equity fund for the protection of the principal amount of fixed-income products. The current Chinese society there are still many private equity investors although to meet the financial requirements of qualified investors, but the lack of legal and investment knowledge, can not distinguish raise false propaganda and related personnel lure. Once the investment fund product failure occurs, the risk of payment crisis, investors are deceived not accept the reality, because the recruitment of personnel Recommend expression and fund contract inconsistent, insufficient evidence and other reasons, the interests of investors such demands difficult to be guaranteed.
3, to non-qualified investors to raise funds
Individual institutions to raise funds raised irregularities, violation of the relevant provisions of the "Interim Measures", and did not examine whether the relevant conditions QFII investors to meet, not on the ability to identify risk and risk tolerance of investors identify, did not fulfill investor appropriate review obligations. Recruitment agency "does not only raise money Man", corresponding to not have the ability to identify risk and risk tolerance of investors selling private equity funds, even to non-qualified investors to raise funds to give investors cause it can not afford the consequences of a serious threat social stability and unity.
4, the illegal sale of part of the employees' fly alone. "
In the private equity fund raising related links, there are some employees without formal authorization that is engaged in activities to raise the phenomenon, once the risk of such exposure to private equity funds, activist investors will suffer many obstacles. Thus, the sale of related personnel "fly alone" in urgent need to curb illegal, the illegal sale of acquiescence practitioners should bear the responsibility, "fly alone" recruitment agency.
The survey reflects the industry self-regulation of private equity industry, the lack of standardized guidance criminals from taking advantage, ignoring the laws and regulations, even under the guise of illegal fund-raising private equity real name of the line. Illegal private confuse not only seriously damaged the interests of individual investors, while giving the industry a negative impact, undermining the growth of the private equity industry foundation.
(B) private equity fund raising aspects of the main issues
1, "offering pipe unclear responsibilities" spawned industry chaos
Private equity industry, due to unclear responsibilities and recruitment and management dispute case everywhere, but due to the inherent characteristics of the private equity industry, "offering", "tube" clear division of responsibilities of managers, recruitment agencies, investors and even the entire industry will be adversely affected.
(1) "raise pipe unclear responsibilities," there is a huge moral hazard
Private equity fund managers follow different investment philosophy, investment approach taken by different private equity fund's investment style and diverse. Investors need to choose for their own private equity fund managers, and private equity fund managers also need to choose the product that matches the risk of qualified investors. However, some commissioned by recruitment agencies, under cost of sales inducements, the use of asymmetric information to investors to promote their products, but in the fund after the fund investment risk to non-parties to the contract on the grounds, does not assume responsibility for raising and information disclosure, let Investors bear the ultimate moral hazard. There are institutional investors reflecting the frequent question managers of investment decisions and investment philosophy, when the product value fluctuations or even direct complaints manager, making it difficult to maintain bilateral cooperation, and raise agency entrusted to investors the ability to control risk identification and promote products in the process of due diligence is not an important cause of the above problems.
(2) "offering pipe unclear responsibilities" harm the interests of recruitment agencies
In practice the presence of private equity fund managers entrusted by banks, brokerages and other institutions for the private equity fund consignment by letter of the phenomenon itself, the staff entrusted with recruitment agencies in the sales process of the Fund fails to fulfill the bounden duty of disclosure, investors do not know their purchase there is no legal relationship between the Fund's investment management products and sales inauguration of institutions, private equity fund products more than once a problem, investors tend to raise agency entrusted with the requirements of honor, which will result in their daily work and raise the reputation of the institution adverse effects.
(3) "offering pipe unclear responsibilities," it is difficult to achieve effective non-public offer
The establishment of private equity funds must be raised in a non-public way, but because of the division of responsibility is unclear, ill-defined legal relationship, in practice, when the mechanism by raising private equity fund managers commissioned by private equity fund products to sell to customers to ensure that recruitment is difficult nonpublic there is a very high risk industry.
2, private fund raising there is a missing link in the regulatory
Under the existing "Fund Law," "Interim Measures" framework, private institutions are required to carry out fund raising QFII identification confirmation and a higher standard of fiduciary duty, so the private equity fund raising should be more stringent regulatory requirements than the public fund, the current public fund sales organization shall be registered with fund sales qualification in China Securities Regulatory Commission and its agencies, and the private fund sales qualification is no express provision.
In reality, mainly through private fund raising manager or a third party in the form of product sales completed under the relevant rules, the penalty for missing regulatory environment, low cost of illegal recruitment agencies, this should lead managers to assume fiduciary responsibility Investors and other appropriate review by the transfer of responsibility for the realization of different forms, confused. Moreover, the agencies should bear the responsibility of raising the same lack of definition and fulfillment, resulting in effective prevention can not raise their illegal behavior. After the breach even against the interests of investors behavior, but the lack of effective mechanisms for recovery and rescue.
The main reason (iii) the existence of illegal private
Current illegal private repeated the one hand, the reason is that private industry rules system is not perfect, the regulation of private fund-raising behavior there is a missing, illegal low cost, driven by a number of private equity funds raised during the walk in the gray area, he played the law walking a fine line; on the other hand, a number of private institutions of the existing "Fund law", under the laws and regulations recognize the "Interim Measures" framework inadequate to properly understand the laws and regulations, the lack of private fund-raising behavior guidance; and finally, investors education is not in place, private institutions and investor information asymmetry is an important cause of extreme illegal private institutions can often succeed.
To achieve the rapid development of the industry, we must take the standardized and compliant way. Private equity fund does not have administrative approval, the implementation of registration system, which means that China's fund industry association responsible for the major thing in hindsight supervisory duties.
In all aspects of fund-raising private equity funds, registration, and other investment operations, the fund-raising is an important part initiated the establishment of private equity funds. Raised code of conduct is to prevent the risk of offending a first line of defense is an important manifestation of the thing in regulation. Implementation of this approach can provide a basis for self-regulation of the market regulate private fund raising, recruitment agencies to guide legal compliance management, enhance investor education.
Second, the main content
"Raised behavior approach" is divided into seven chapters, a total of 342 mainly self-regulation from the scope of application of the measures for raising the general provisions of private equity funds raised, the specific subject of the investigation, referral behavior, confirm qualified investors, etc., reflect the self-regulatory framework for private fund-raising activities. The main contents are as follows:
(A) Scope approach on recruitment
"Raised behavior approach" second, third clear in private investors to raise funds to conduct application of this approach, only China fund industry association registered private equity fund managers, fund sales by registration in China Securities Regulatory Commission business qualifications and become China Fund industry Association of institutions (hereinafter referred to raise institutions) and their employees are permitted to engage Recommend private equity funds, the sale of fund shares (equity), for fund shares (equity) identify / purchase (subscription), redemption Press (exit) and other recruitment services.
Fund outsourcing services to their involvement in private equity fund raising aspects of the business application of this approach. Outsourcing services include the provision of recruitment services to the private equity fund managers get registered fund sales qualification in China Securities Regulatory Commission and China's fund industry association member institutions (hereinafter referred to as fund sales institutions) to provide payment and settlement services for private fund-raising mechanism, and private fund raising business-related services agencies raise private funds settlement funds oversight, share registration.
General provisions (b) private equity funds raised
"Raised behavior approach" the provisions of Chapter II of the general provisions of the recruitment process, including responsibility for private equity fund managers, liability fund sales institutions, fund sales agreement, reasonable duty of care, duty of confidentiality and data retention obligations of investors Wait.
"Raised behavior measures" under Article VI of the responsibility of private equity fund managers, private equity fund managers and fund sales organization commissioned a special obligation to raise private funds. He emphasized the responsibility of private equity fund managers should bear not because the charge was raised and exemptions.
"Raised behavior approach" Article VII private equity fund sales institutions in fund raising process shall perform the duties described, reasonable care, to assume a particular subject of the investigation, private equity funds and qualified investors Available confirmation liability. Article VIII of the private equity fund managers entrusted fund sales organization to raise private equity funds, fund sales agreement shall be signed and annexed to the fund contract. Fund sales agreement shall expressly administrator, rights and obligations of both parties raising mechanism, clear both sides duty, while protecting investors' right to know.
In order to put an end to private sector fund share split of institutional investors will buy and resell the non-qualified investors chaos, "raising behavior approach" Article IX with particular emphasis on the duty of reasonable care recruitment agency, and shall be in the fund contract set out the conditions of the transfer, prohibit any institution or individual for the purpose of illegal sales split purchase private equity funds. "Raised behavior approach" the provisions of Article 10 and 11, respectively, of the obligation of confidentiality and data retention obligations investors to raise institutions.
"Raised behavior approach" Article XII to Article XIII of the private equity fund managers and monitoring bodies must jointly open a special account to raise funds settlement, unified management imputation to raise funds. Obtain fund sales qualified commercial banks, securities companies and other large institutions will raise private funds, can raise its own name opened special accounts settlement funds, but China's fund industry association shall report the relevant air control degrees. At the same time, the supervision of the settlement funds raised dedicated account supervision agreement shall be signed, a clear anti-money laundering obligations jointly and severally liable to perform their duties and the terms of the division of responsibilities, and investor protection funds security. "Raised behavior approach" Article 14 The financial security to raise funds dedicated account settlement put forward specific requirements.
(Iii) with respect to a specific object investigation
"Raised behavior approach" Article XV emphasized the recruitment agency may disclose the information and publicity of the way, make sure that publicize the real information, accurate and complete, the product must not contain funds referral. In the specific subjects of the investigation procedures, "raising behavior approach" Article XVI and Article XVII of the recruitment agencies prior to the private equity investor presentation should take surveys and other means, the affordability of investor risk identification and risk assessed by the investors signed commitments to meet the eligibility criteria of investors. The main contents of the questionnaire on "raising behavior approach" Article XVIII of the core provisions that must be included and highlighted the investor access to relevant information to investors should be on a voluntary basis. China Fund Industry Association has developed a "private equity investor risk questionnaire (Content and Format Guidelines)" in accordance with the "Interim Measures" requirement.
Available for the Internet media private equity funds, "the fund raising approach" Article XIX Available online recruitment agency private equity fund set up specific objects online survey program make a special request.
(Iv) on publicity and promotion of private equity funds
Recommend to regulate the behavior of private equity fund raising mechanism to prevent the illegal sale of practitioners' fly alone ", to avoid bear the responsibility," raising behavior approach "Article XX of the responsible party promotional material for raising mechanism, should the content of the promotional material authenticity, integrity, responsible for the accuracy. "Raised behavior approach" Article 21 of the promotional material should have the basic elements of the content and information disclosure. Meanwhile, the "raising behavior approach" of Article 22 and Article 23 also provides for negative Available from acts prohibited and forbidden Recommend carrier, fully detailed the private equity fund promoted by self-regulatory requirements.
(V) with respect to qualified investors confirm
"Raised behavior approach" Article 24 clearly institutions should raise investor presentation to its ability to identify risks and risk capacity to match the private equity funds. In terms of fund risk disclosure, in order to better protect the interests of investors, "the fund raising approach" Article 25 provides risk disclosure statement of the specific content, in accordance with the "Interim Measures" requirements, China Fund Industry Association has developed a "private investment funds risk Disclosure Statement (content and format guidelines). " Article 26 lays down the procedure to confirm the identity of qualified investors, investors should provide proof of financial assets, raise agency should review its compliance with eligibility conditions for investors. Article 27 emphasizes the standard of qualified investors, "Interim Measures" under. Article 28 sets out the conditions and the scope of the exemption QFII confirmed.
Article 29 of the cooling-off period to make investment regulations explicitly require qualified investors after the completion of the confirmation process, recruitment agencies should give investors to invest at least a day cooling-off period, after a cooling-off period of investment, the investor may be signed only private equity fund contract, the fund investors after the signing of the contract, the end of the fund raising services sales organization.
Private equity fund managers should be based on the provisions "of the fund raising approach" Article 30, after the signing of the contract funds to investors in an appropriate manner recording phone, email, etc. visits, telephone interviews and regulations without the confirmation process, private equity fund managers can not Fund signed contract. Which emphasized a return visit to confirm the signing of the contract with the Fund private equity fund managers should be complete, private equity fund managers to assume fiduciary responsibility, in accordance with laws and regulations should bear the responsibility not because the charge to raise and transfer requirements for private equity fund managers bear the reverse qualified confirm the responsibility of investors to avoid raising staff recruitment manager does not recognize the responsibility of the appropriate behavior prevarication.
(Vi) regarding self-management
"Raised behavior approach" Article 31 to Article 40 of the recruitment agencies, funds and outsourcing services related staff in violation of the respective penalties in the process of raising private equity funds, the clear China's fund industry association in the industry self-regulation, self-regulation compliance checks and punish violations of the rules of conduct and other self-regulatory responsibilities. Investors can raise a complaint or report a violation to the Association acts in accordance with the relevant provisions of China's fund industry association. Recruitment agencies, funds outsourcing service providers and their employees due to irregularities in the recruitment process is to take China Fund Industry Association, disciplinary action, the Chinese fund industry association in light of circumstances recorded in their credit files.
At the same time, raising agencies, funds outsourcing service providers and their employees violate laws, administrative regulations and the relevant provisions of China Securities Regulatory Commission, the China Securities Regulatory Commission or transferred to judicial organs.
(Vii) Annex
"Raised behavior approach" the provisions of Articles 41 and 42 the date of entry into force of this approach since the announcement, China's fund industry association based approach unique power to interpret the party.
Third, the "raising behavior approach" major issues involved
(A) specification to raise the qualification of private equity funds
In view of the raising of private equity funds / sales should have a higher standard than the public fund sales, "raising behavior measures" will raise the qualification bodies identified as China's fund industry association in China registered private equity fund managers, fund registration in the China Securities Regulatory Commission sales qualification and become China Fund industry Association of institutions. While emphasizing the obligation of the trustee's private equity fund managers, private equity fund managers should bear responsibility not because of the inherent trust transferred; on the other hand stressed the duty of care recruitment agency, sales appropriateness of liability, information disclosure obligations, with a view able to exclude third-party financial institutions on disorderly market, avoid regulatory vacuum caused by growing fraud and illegal fund-raising optimization problems, to better safeguard the interests of investors and promoting the existing market private equity fund raising pattern.
(B) Specification private equity affiliate of accountability
Private equity fund managers should follow "the fund raising approach" requirements, fiduciary responsibility of the fund contract, the trustee to fulfill obligations, and assume responsibility for Investor Relations appropriateness. Recruitment agencies take in all aspects of private equity fund raising that is a particular object investigation, publicity and promotion, Investors QFII confirmation of the duties.
Private equity funds for a specific target non-public offering, compared with the raised funds, private equity funds to raise QFII institutions are required to fulfill the identification confirmation and a higher standard of fiduciary duty, so the private equity fund raising should be more stringent regulatory requirements than the public fund. Currently sales raised funds mainly taken institutional fund raising and self-regulatory agencies entrusted China Securities Regulatory Commission to obtain qualified sales fund sales on behalf of two ways, consignment in dispute and determine the tax payment obligations difficult to clarify responsibilities in practice has occurred many problems, so in order to better regulate private fund-raising behavior, it is necessary to scope and qualifications of private fund raising mechanism will be determined so clearly related obligations.
To sum up, this "raising behavior approach" clearly established private equity fund raising by the administrator, and as the first responsible person to undertake fund operations during the corresponding responsibility, with particular emphasis on private equity fund managers and trustees of the obligations of Investors responsible confirmation.
(Iii) refine the private fund raising program
"Raised behavior approach" to the "Interim Measures" the relevant provisions on private equity funds raised were refined, from the content to non-specific publicity limited to specific objects Recommend private equity funds, QFII confirm and sign the contract, the three dimensions progressive layers, clear private fund raising program. First, clear for the public disclosure is limited to private equity managers to promote its brand, investment strategies and other information; second, without specific target groups by investor risk identification and risk tolerance ability to filter out specific investigation as a potential target customer-specific objects Recommend private equity funds, guarantee private property; third, after confirmation QFII program, referral and investors the ability to match the private equity funds. Investors expressed by the objective of voluntary investment intentions, raising institution shall truthfully fully disclose the risks involved in the fund to investors, raising institutions subject to qualified investors substantive examination before signing the contract; fourth, cooling-off period is set to invest, visit confirmation institutional arrangements to further protect the legal rights of private equity investors.
(Iv) special account to raise funds and secure
"Raised behavior approach" provides a private equity fund managers in front of private fund raising and monitoring bodies must jointly open a private equity fund to raise funds dedicated account settlement, settlement funds raised to achieve the imputation management. This approach to the special account of the nature of the accounts condition, make specification "cash in transit" in the home, to raise funds for security etc., and clearly raise the special account for the oversight bodies and the relevant provisions of the division of responsibilities.
Special Provisions (v) fund sales institutions
"Raised behavior approach" refers to the alleged fund sales organization to provide placement services to private equity fund managers, fund sales by registration and qualifications to become China's fund industry association member institutions in China Securities Regulatory Commission. First, the fund sales institutions should have fund sales qualification, self-discipline from the members point of view, the fund sales institutions at the same time to become China Fund Industry Association; secondly, private equity fund managers can only be commissioned sales organization, rather than individuals, in favor of promote the wealth management industry to upgrade professional and institutionalized.
To guard against the private equity industry by raising and management responsibilities arising from unclear shirk responsibility, adversely affect the entire industry, "raising behavior approach" special provisions for private equity fund managers shall conclude agreements with fund sales fund sales institutions, and the fund contract Annex, fund managers should be made clear in the sales agreement, the division of responsibilities and rights and obligations of the fund sales institutions, and relevant content should be truthfully informed by a comprehensive institutional investors raised.
At the same time, private equity fund managers entrusted fund sales organization to raise private funds, shall perform in accordance with the laws and regulations of the reporting and disclosure obligations, private equity fund managers shall not delegate its responsibility to raise exemption should bear; the fund sales institutions shall honesty , diligence, dedication, prevent conflicts of interest, to fulfill this obligation, the reasonable duty of care, to assume a specific subject of the investigation, private equity funds and qualified investors Available confirmation responsible, and shall not engage in occupation of the Fund's assets and client assets, the use of public funds is not trading information for illegal activities.
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