Client Alert – AMAC Opened PFM Registration to WFOE

Our Observation
Our Observation: It is definitely a good surprise to observe such a swift action of the CSRC and the AMAC allowing wholly foreign-owned enterprise and majority foreign-owned enterprise to obtain the private securities investment fund manager registration following the 2016 China-US Strategic & Economic Dialogue. Though this action does not intend to open a window for cross-border money in-flow or out-flow for the time being, an access and entry license to the Chinese asset management market will definitely attract many foreign fund managers’ interest and it is the time to measure their confidence and ambition in the Chinese asset management market.
On June 30, 2016, the Assets Management Association of China (“AMAC”) issued the Q&A Regarding Registration and Filing of Private Funds (X)(“AMAC Q&A (X)”). On the same day, the China Securities Regulatory Commission (“CSRC”) released the Media Q&A as echoing. Below is a full text of the AMAC Q&A (X) as well as its English version.
问：第八轮中美战略与经济对话政策成果中包括欢迎符合条件的外商独资和合资企业申请登记成为私募证券基金管理机构，按规定开展包括二级市场证券交易在内的私募证券基金管理业务。请问，外商独资和合资私募证券基金管理机构申请登记成为私募证券基金管理人有何要求？
Q: Among the policy achievements of the 8th Round China-US Strategic & Economic Dialogue, there includes a commitment welcoming qualified WFOEs (wholly foreign-owned enterprises) and JVs (joint venture enterprises) to apply for the registration of private securities investment fund management institution (“PFM”) and engage in private securities fund management businesses (including securities trading in the secondary market) in accordance with stipulations. The question is, what are the requirements for a WFOE or JV (“WFOE or JV PFM”) if it applies for the private securities investment fund manager registration?
答：根据第七轮、第八轮中美战略与经济对话以及第七次中英经济财金对话达成的政策成果，经中国证监会同意，外商独资和合资私募证券基金管理机构在中国境内开展私募证券基金管理业务，应当在中国证券投资基金业协会登记为私募证券基金管理人，并应当符合以下条件：
A: In accordance with the policy achievements reached in the 7th and 8th Round China-US Strategic & Economic Dialogue and the 7th China-UK Economic & Financial Dialogue, subject to the consent by the CSRC, a WFOE or JV shall be registered as a PFM with the AMAC for engaging in the private securities fund management businesses within the territory of China, and shall meet the following requirements:
(一) 该私募证券基金管理机构为在中国境内设立的公司；
a. It shall be a company incorporated within the territory of China;
(二) 该私募证券基金管理机构的境外股东为所在国家或者地区金融监管当局批准或者许可的金融机构，且境外股东所在国家或者地区的证券监管机构已与中国证监会或者中国证监会认可的其他机构签订证券监管合作谅解备忘录；
b. Its foreign shareholder shall be a financial institution approved or licensed by the competent financial regulatory authorities in the country or region of its domicile, and the securities regulatory authorities of the country or region of its domicile shall have signed a memorandum of understanding on cooperation regarding the securities regulation with the CSRC or other institutions recognized by the CSRC;
(三) 该私募证券基金管理机构及其境外股东最近三年没有受到监管机构和司法机构的重大处罚。
c. It and its foreign shareholder shall not have been subject to any severe penalty by a securities regulator or justice department in the preceding three years.
有境外实际控制人的私募证券基金管理机构，该境外实际控制人也应当符合上述第（二）、（三）项条件。
If it has a foreign de facto controller, such foreign de facto controller shall also meet the requirements set forth in above Item b and c.
外商独资和合资私募证券基金管理机构开展私募证券投资基金业务，除应当符合《证券投资基金法》、《私募投资基金监督管理暂行办法》、《私募投资基金管理人登记和基金备案办法（试行）》及其他法律法规规定外，还应当遵守以下规定：
In order to engage in private securities fund management businesses, in addition to conforming with the Securities Investment Fund Law, the Interim Measures for the Supervision and Administration of Private Investment Funds, the Measures on Registration of Private Investment Fund Managers and Filing of Funds (Trial) and other laws and regulations, a WFOE or JV PFM shall also comply with the following stipulations when conducting private securities fund management businesses:
(一) 资本金及其结汇所得人民币资金的使用，应当符合国家外汇管理部门的相关规定；
a. Usage of its capital funds as well as the RMB funds settled therefrom shall comply with the relevant rules stipulated by the foreign exchange authorities;
(二) 在境内从事证券及期货交易，应当独立进行投资决策，不得通过境外机构或者境外系统下达交易指令。中国证监会另有规定的除外。
b. For securities or futures trading within the territory of China, the investment decisions shall be made independently, and trading orders shall not be delivered by an institution or system located outside China, unless otherwise stipulated by the CSRC.
问：外商独资和合资私募证券基金管理机构如何进行私募证券基金管理人登记？
Q: How does a WFOE or JV apply for private securities fund manager registration?
答：外商独资和合资私募证券基金管理机构申请私募基金管理人登记，应当通过私募基金登记备案系统（https://pf.amac.org.cn），如实填报以下信息：
A: For a WFOE or JV applying for private securities fund manager registration, it shall faithfully fill in and submit the following information via the Private Fund Registration and Filing System (https://pf.amac.org.cn):
(一) 《私募投资基金管理人登记和基金备案办法（试行）》及中国证券投资基金业协会已出台的相关规定所要求的私募证券基金管理人相关登记信息，包括前述问答中所列条件证明材料；
a. The relevant registration information for private securities fund manager required by the Measures on Registration of Private Investment Fund Managers and Filing of Funds (Trial) and the other relevant rules issued by AMAC, including the evidentiary materials regarding the eligibility set forth in the above Q&A;
(二) 私募基金登记备案承诺函，承诺所提交的信息和材料真实、准确、完整，不存在任何虚假记载、误导性陈述或重大遗漏，承诺遵守中国法律法规及私募基金相关自律规则；
b. A letter of undertaking for private fund registration and filing, which undertakes that all information and materials submitted are true, accurate, complete, and there is no false record, misleading statement or material omission contained therein, and to abide by the Chinese laws and regulations and the relevant self-disciplinary rules of the AMAC;
(三) 中国律师事务所及其经办律师出具的《私募基金管理人登记法律意见书》。除《私募基金管理人登记法律意见书指引》的要求以外，相关律师事务所及其经办律师在法律意见书中，还应对该申请机构是否符合前述问答中所列登记条件和要求发表结论性意见。
c. A legal opinion on the Registration of Private Fund Manager issued by a Chinese law firm and its attorneys-in-charge. Apart from those requirements of the Guide on Legal Opinions for Registration of Private Fund Managers, the relevant law firm and its attorneys-in-charge shall issue conclusive opinions on whether such applicant conforms to the eligibility conditions and requirements set forth in the above Q&A in the legal opinion.
外商独资和合资私募证券基金管理机构提供的登记申请材料完备的，中国证券投资基金业协会将自收齐材料之日起20个工作日内，以通过协会官方网站（http://www.amac.org.cn）公示私募基金管理人基本情况的方式，为其办结登记手续。
If the application materials for registration submitted by a WFOE or JV are complete, the AMAC will within 20 working days after receiving all such materials accomplish the registration formalities for it by publicizing the basic information of private fund managers on its official website (http://www.amac.org.cn).
外商独资和合资私募证券基金管理机构登记后，应当依法及时展业。其设立的私募证券投资基金募集完毕后，应当根据有关规定在中国证券投资基金业协会通过私募基金登记备案系统及时履行备案手续，按时履行私募基金管理人及其管理的私募基金的季度、年度和重大事项信息报送更新等信息报送义务。
WFOE or JV shall after its PFM registration launch its businesses timely according to laws. Upon completion of the fundraising of the relevant private securities investment fund, it shall in accordance with the relevant laws promptly file with AMAC for filing via the Private Fund Registration and Filing System, and punctually perform the information report obligations for private fund manager and private funds managed by them, including the quarterly, annual and material event information reporting and updating.