大红鹰dhy优惠大厅(中国)有限公司Haiwen Finance and Asset Management Monthly (July)

Introduction

To make 大红鹰dhy优惠大厅(中国)有限公司 finance and asset management industry keep abreast of 大红鹰dhy优惠大厅(中国)有限公司 latest industry developments, Haiwen prepares 大红鹰dhy优惠大厅(中国)有限公司 "Haiwen Finance and Asset Management Monthly". This monthly reading aims to introduce and provide brief comments on regulatory development and industry news.

In July of 2023, for new rules and regulations, 大红鹰dhy优惠大厅(中国)有限公司 State Council released 大红鹰dhy优惠大厅(中国)有限公司 Regulations on 大红鹰dhy优惠大厅(中国)有限公司 Supervision and Administration of Private Investment Funds; 大红鹰dhy优惠大厅(中国)有限公司 AMAC released 大红鹰dhy优惠大厅(中国)有限公司 Measures for 大红鹰dhy优惠大厅(中国)有限公司 Filing for Private Asset Management Plans of Securities and Futures Operating Institutions, 大红鹰dhy优惠大厅(中国)有限公司 Guidelines for Handling 大红鹰dhy优惠大厅(中国)有限公司 Disappearance of Private Fund Managers and 大红鹰dhy优惠大厅(中国)有限公司 Self-Regulatory Inspection Rules of 大红鹰dhy优惠大厅(中国)有限公司 AMAC; 大红鹰dhy优惠大厅(中国)有限公司 CSRC issued 大红鹰dhy优惠大厅(中国)有限公司 Provisions on Improving 大红鹰dhy优惠大厅(中国)有限公司 Regulation of Specific Short-term Trading (Draft for Comment) and 大红鹰dhy优惠大厅(中国)有限公司 Interim Provisions on Position Management of Futures Market; 大红鹰dhy优惠大厅(中国)有限公司 NAFR issued 大红鹰dhy优惠大厅(中国)有限公司 Guidance on Issues Reflected by 大红鹰dhy优惠大厅(中国)有限公司 Industry Following 大红鹰dhy优惠大厅(中国)有限公司 Implementation of 大红鹰dhy优惠大厅(中国)有限公司 Notice on Regulating 大红鹰dhy优惠大厅(中国)有限公司 Classification of Trust Business of Trust Companies (I) to 大红鹰dhy优惠大厅(中国)有限公司 trust industry, and issued 大红鹰dhy优惠大厅(中国)有限公司 Implementation Measures for Administrative Licensing of Non-bank Financial Institutions (Draft for Comment) and 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment); 大红鹰dhy优惠大厅(中国)有限公司 SAC issued 大红鹰dhy优惠大厅(中国)有限公司 Implementation Rules for Integrity Practice of Securities Operators and Their Staffs; 大红鹰dhy优惠大厅(中国)有限公司 PBOC released 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Data Security in 大红鹰dhy优惠大厅(中国)有限公司 Business Field of 大红鹰dhy优惠大厅(中国)有限公司 PBOC (Draft for Comment).

For industry news, three financial regulatory authorities (大红鹰dhy优惠大厅(中国)有限公司 PBOC, NAFR and CSRC) released "Urge Rectification of Platform Enterprises’ Financial Business and Improved Normalized Regulation"; 大红鹰dhy优惠大厅(中国)有限公司 CSRC answered questions on publicly offered fund fees reform.

I Latest Rules and Regulations

1. Regulations on 大红鹰dhy优惠大厅(中国)有限公司 Supervision and Administration of Private Investment Funds Were Officially Released

On July 9, 2023, 大红鹰dhy优惠大厅(中国)有限公司 State Council released 大红鹰dhy优惠大厅(中国)有限公司 Regulations on 大红鹰dhy优惠大厅(中国)有限公司 Supervision and Administration of Private Investment Funds (大红鹰dhy优惠大厅(中国)有限公司 "Regulations"), which shall come into force on September 1, 2023.

大红鹰dhy优惠大厅(中国)有限公司 Regulations consolidate and reiterate 大红鹰dhy优惠大厅(中国)有限公司 existing regulatory requirements of 大红鹰dhy优惠大厅(中国)有限公司 CSRC, 大红鹰dhy优惠大厅(中国)有限公司 AMAC and other authorities on private investment funds, and have filled a legislative void at 大红鹰dhy优惠大厅(中国)有限公司 administrative regulations level for private investment funds and introduced new provisions such as exemption for fund of funds that meets specific conditions from being deemed as an investment tier, 大红鹰dhy优惠大厅(中国)有限公司 establishment of a private investment fund monitoring mechanism by 大红鹰dhy优惠大厅(中国)有限公司 CSRC, etc. Furthermore, 大红鹰dhy优惠大厅(中国)有限公司 supervision and administration authority over private investment funds is hereby unified under 大红鹰dhy优惠大厅(中国)有限公司 CSRC, 大红鹰dhy优惠大厅(中国)有限公司 means of oversight during and after events have been enhanced, and 大红鹰dhy优惠大厅(中国)有限公司 penalties for illegal and irregular behaviors have been intensified.

Haiwen Comments

As 大红鹰dhy优惠大厅(中国)有限公司 first administrative regulation in 大红鹰dhy优惠大厅(中国)有限公司 private investment fund industry, 大红鹰dhy优惠大厅(中国)有限公司 release of 大红鹰dhy优惠大厅(中国)有限公司 Regulations symbolizes 大红鹰dhy优惠大厅(中国)有限公司 perfection of 大红鹰dhy优惠大厅(中国)有限公司 foundational legal system for regulating private investment funds. It also helps unify regulatory standards, promote further revision and improvement of relevant supporting regulations and self-disciplinary rules, and marks a new phase for 大红鹰dhy优惠大厅(中国)有限公司 high-quality development of 大红鹰dhy优惠大厅(中国)有限公司 industry, having milestone significance.

For detailed analysis on 大红鹰dhy优惠大厅(中国)有限公司 Regulations, please refer to related articles on our Wechat Public accounts: "Haiwen Observation | Analysis of 大红鹰dhy优惠大厅(中国)有限公司 Private Funds Regulation: Core Content and Far-reaching Impact of a Decade Milestone in Private Funds Supervision (Part I)"; "Haiwen Observation | Analysis of 大红鹰dhy优惠大厅(中国)有限公司 Private Funds Regulation: Core Content and Far-reaching Impact of a Decade Milestone in Private Funds Supervision (Part II) ".

2. AMAC Released 大红鹰dhy优惠大厅(中国)有限公司 Measures for 大红鹰dhy优惠大厅(中国)有限公司 Filing for Private Asset Management Plans of Securities and Futures Operating Institutions

On July 14, 2023, 大红鹰dhy优惠大厅(中国)有限公司 AMAC released and implemented 大红鹰dhy优惠大厅(中国)有限公司 Measures for 大红鹰dhy优惠大厅(中国)有限公司 Filing for Private Asset Management Plans of Securities and Futures Operating Institutions ("New Filing Measures"), as 大红鹰dhy优惠大厅(中国)有限公司 complementary self-disciplinary rules to 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Private Asset Management Business of Securities and Futures Operating Institutions and 大红鹰dhy优惠大厅(中国)有限公司 Administrative Provisions on 大红鹰dhy优惠大厅(中国)有限公司 Operation of Private Asset Management Plans by Securities and Futures Operating Institutions. 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for 大红鹰dhy优惠大厅(中国)有限公司 Filing for Private Asset Management Plans of Securities and Futures Operating Institutions (Trial) issued on June 3, 2019, were simultaneously repealed.

大红鹰dhy优惠大厅(中国)有限公司 main revisions in 大红鹰dhy优惠大厅(中国)有限公司 New Filing Measures include: (1) emphasizing 大红鹰dhy优惠大厅(中国)有限公司 active management responsibilities of 大红鹰dhy优惠大厅(中国)有限公司 manager and 大红鹰dhy优惠大厅(中国)有限公司 development of its professional capabilities, and clarifying 大红鹰dhy优惠大厅(中国)有限公司 principles and specific requirements for engaging investment advisors for asset management plans; (2) refining and improving risk control arrangements, including detailed requirements for control of related transactions, emphasizing 大红鹰dhy优惠大厅(中国)有限公司 prohibition of directly or indirectly participating in structured bond issuance, etc.; (3) further emphasizing and clarifying prohibitive behaviors, such as guaranteeing principal or returns, and engaging in activities conflicting with asset management; (4) moderately relaxing equity investment operations, optimizing requirements for installment payments, additional fundraising, portfolio investment, SPV nesting layer, expense allocation, and other series of requirements.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 New Filing Measures elevates 大红鹰dhy优惠大厅(中国)有限公司 filing practical experience and mature filing standards to self-disciplinary rules, achieving a systematic, open, and transparent filing standard. It further responds to 大红鹰dhy优惠大厅(中国)有限公司 practical needs of 大红鹰dhy优惠大厅(中国)有限公司 industry (including appropriately improving 大红鹰dhy优惠大厅(中国)有限公司 relevant requirements for equity investment operations), optimizes 大红鹰dhy优惠大厅(中国)有限公司 filing verification standards and requirements, and aids in controlling 大红鹰dhy优惠大厅(中国)有限公司 risks of private asset management business, promoting 大红鹰dhy优惠大厅(中国)有限公司 standardized development of 大红鹰dhy优惠大厅(中国)有限公司 industry.

3. CSRC Issued 大红鹰dhy优惠大厅(中国)有限公司 Provisions on Improving 大红鹰dhy优惠大厅(中国)有限公司 Regulation of Specific Short-term Trading (Draft for Comment)

On July 21, 2023, 大红鹰dhy优惠大厅(中国)有限公司 CSRC released 大红鹰dhy优惠大厅(中国)有限公司 Provisions on Improving 大红鹰dhy优惠大厅(中国)有限公司 Regulation of Specific Short-term Trading (Draft for Comment) (大红鹰dhy优惠大厅(中国)有限公司 "Provisions"). 大红鹰dhy优惠大厅(中国)有限公司 main contents of 大红鹰dhy优惠大厅(中国)有限公司 Provisions include:

(1) clarifying 大红鹰dhy优惠大厅(中国)有限公司 applicable subjects scope of specific short-term trading, limited to shareholders holding 5% or more in listed companies or NEEQ (New Third Board) listed companies, and directors, supervisors, and senior executives thereof. Investors who does not qualify at 大红鹰dhy优惠大厅(中国)有限公司 time of buying but do at 大红鹰dhy优惠大厅(中国)有限公司 time of selling is still required to comply with 大红鹰dhy优惠大厅(中国)有限公司 specific short-term trading system;

(2) defining 大红鹰dhy优惠大厅(中国)有限公司 scope of securities applicable to specific short-term trading, including stocks and other securities with equity attributes;

(3) clarifying 大红鹰dhy优惠大厅(中国)有限公司 standards for calculation of securities holdings, specifying that shares held by major shareholders, directors, supervisors, senior executives, and their spouses, children, and parents, as well as shares held by utilizing other people's accounts, should be consolidated, and specific short-term trading should not be calculated across different types of securities;

(4) defining 大红鹰dhy优惠大厅(中国)有限公司 buying and selling behavior of specific short-term trading, and clarifying 11 exemptions, including preferred stock conversion, exchangeable bonds conversion, and convertible bond conversion;

(5) establishing 大红鹰dhy优惠大厅(中国)有限公司 applicable standards for domestic institutions. 大红鹰dhy优惠大厅(中国)有限公司 Provisions specifically clarify that securities holdings of social security funds, basic pension insurance funds, annuity funds, publicly offered funds, and collective private asset management products managed by securities and fund operation institutions shall be calculated separately by product (or portfolio); qualified private securities fund managers may calculate positions by product upon application to 大红鹰dhy优惠大厅(中国)有限公司 AMAC;

(6) clarifying 大红鹰dhy优惠大厅(中国)有限公司 applicable standards for foreign investors. In accordance with 大红鹰dhy优惠大厅(中国)有限公司 principle of internal and external consistency, allow qualified foreign public fund managers to calculate their positions on a product-by-product basis upon application to 大红鹰dhy优惠大厅(中国)有限公司 CSRC, and exempt 大红鹰dhy优惠大厅(中国)有限公司 Hong Kong Securities Clearing Company Limited from 大红鹰dhy优惠大厅(中国)有限公司 application of 大红鹰dhy优惠大厅(中国)有限公司 specific short-term trading system under 大红鹰dhy优惠大厅(中国)有限公司 Shanghai-Hong Kong Stock Connect and 大红鹰dhy优惠大厅(中国)有限公司 Shenzhen-Hong Kong Stock Connect mechanism;

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Securities Law sets out 大红鹰dhy优惠大厅(中国)有限公司 principle provisions on 大红鹰dhy优惠大厅(中国)有限公司 short-term trading system. On this basis, 大红鹰dhy优惠大厅(中国)有限公司 Provisions summarize 大红鹰dhy优惠大厅(中国)有限公司 regulatory practice of short-term trading and explicitly stipulate 大红鹰dhy优惠大厅(中国)有限公司 applicable scope, exemption situations, position calculation by product in case of specific institutional positions, and foreign investor application standards. It helps standardize 大红鹰dhy优惠大厅(中国)有限公司 regulation of specific short-term trading, stabilize market expectations, enhance transaction convenience, increase 大红鹰dhy优惠大厅(中国)有限公司 attractiveness of 大红鹰dhy优惠大厅(中国)有限公司 A-share market, and promote 大红鹰dhy优惠大厅(中国)有限公司 opening up and high-quality development of 大红鹰dhy优惠大厅(中国)有限公司 capital market.

4. CSRC Released 大红鹰dhy优惠大厅(中国)有限公司 Interim Provisions on Position Management of Futures Market

On July 31, 2023, 大红鹰dhy优惠大厅(中国)有限公司 CSRC released 大红鹰dhy优惠大厅(中国)有限公司 Interim Provisions on Position Management of Futures Market (“Interim Provisions”), 大红鹰dhy优惠大厅(中国)有限公司 main content of which includes: (1) specifying 大红鹰dhy优惠大厅(中国)有限公司 principles for formulating or adjusting position limits, 大红鹰dhy优惠大厅(中国)有限公司 setting methods thereof, and regulating trading behavior; (2) establishing principle regulation of hedging activities, explicitly setting forth 大红鹰dhy优惠大厅(中国)有限公司 obligations of futures exchanges for approval and management and requiring that hedging position limits should correspond to 大红鹰dhy优惠大厅(中国)有限公司 scale of traders' risk management activities, market risk tolerance; (3) improving large position reporting system, further enriching 大红鹰dhy优惠大厅(中国)有限公司 content of reporting and 大红鹰dhy优惠大厅(中国)有限公司 obligations of reporting party, and specifically authorizing futures exchanges to require traders to submit relevant information regarding their participation in domestic and overseas futures markets, over-大红鹰dhy优惠大厅(中国)有限公司-counter derivative markets, and spot markets; (4) specifying requirements for position consolidation, specifically, requiring futures exchanges to consolidate 大红鹰dhy优惠大厅(中国)有限公司 positions of 大红鹰dhy优惠大厅(中国)有限公司 same trader on 大红鹰dhy优惠大厅(中国)有限公司 same type of trading code with multiple members and those of multiple accounts where a de facto control relationship exists, and establishing principle rules for exemptions related to position consolidation.

Haiwen Comments

Position management is 大红鹰dhy优惠大厅(中国)有限公司 core regulatory means and method in 大红鹰dhy优惠大厅(中国)有限公司 futures market. Based on regulatory practice experience, 大红鹰dhy优惠大厅(中国)有限公司 Interim Provisions implement 大红鹰dhy优惠大厅(中国)有限公司 management requirements related to position limits and hedging under 大红鹰dhy优惠大厅(中国)有限公司 Futures and Derivatives Law, enhance 大红鹰dhy优惠大厅(中国)有限公司 precision of position management, contributing to regulating futures market position behavior, and promoting 大红鹰dhy优惠大厅(中国)有限公司 stable operation of 大红鹰dhy优惠大厅(中国)有限公司 futures market.

5. NAFR Issued 大红鹰dhy优惠大厅(中国)有限公司 Guidance on Issues Reflected by 大红鹰dhy优惠大厅(中国)有限公司 Industry Following 大红鹰dhy优惠大厅(中国)有限公司 Implementation of 大红鹰dhy优惠大厅(中国)有限公司 Notice on Regulating 大红鹰dhy优惠大厅(中国)有限公司 Classification of Trust Business of Trust Companies (I) to 大红鹰dhy优惠大厅(中国)有限公司 Trust Industry

In July 2023, 大红鹰dhy优惠大厅(中国)有限公司 NAFR issued 大红鹰dhy优惠大厅(中国)有限公司 Guidance on Issues Reflected by 大红鹰dhy优惠大厅(中国)有限公司 Industry Following 大红鹰dhy优惠大厅(中国)有限公司 Implementation of 大红鹰dhy优惠大厅(中国)有限公司 Notice on Regulating 大红鹰dhy优惠大厅(中国)有限公司 Classification of Trust Business of Trust Companies (I) (大红鹰dhy优惠大厅(中国)有限公司 "Guidance") to 大红鹰dhy优惠大厅(中国)有限公司 trust industry.

大红鹰dhy优惠大厅(中国)有限公司 Guidance focuses on providing further direction for three main aspects: asset management trusts, asset service trusts, and other related issues. 大红鹰dhy优惠大厅(中国)有限公司 matters that have attracted significant market attention include: (1) clarifying that trust companies may prudently carry out non-standard debt and unlisted enterprise equity investment business; (2) permitting standard trust products to conduct bond repurchase business in 大红鹰dhy优惠大厅(中国)有限公司 open market according to 大红鹰dhy优惠大厅(中国)有限公司 proportion stipulated in 大红鹰dhy优惠大厅(中国)有限公司 Guiding Opinions on Regulating Asset Management Business of Financial Institutions (大红鹰dhy优惠大厅(中国)有限公司 "New Asset Management Regulations"); (3) clarifying 大红鹰dhy优惠大厅(中国)有限公司 number and qualifications of investors in asset management trusts shall be implemented in accordance with 大红鹰dhy优惠大厅(中国)有限公司 provisions of 大红鹰dhy优惠大厅(中国)有限公司 New Asset Management Regulations; (4) specifying that asset service trusts may "conditionally carry out" trust loan business.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Guidance timely responds to certain issues faced by trust companies in 大红鹰dhy优惠大厅(中国)有限公司 implementation of 大红鹰dhy优惠大厅(中国)有限公司 Notice on Regulating 大红鹰dhy优惠大厅(中国)有限公司 Classification of Trust Business of Trust Companies. It further clarifies certain standards, logic, and elements of trust business classification, differentiates 大红鹰dhy优惠大厅(中国)有限公司 boundaries of similar trust businesses, and specifies certain investment/raising requirements for some trust businesses, thereby facilitating 大红鹰dhy优惠大厅(中国)有限公司 standardized development of trust business classification.

6. PBOC Released 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Data Security in 大红鹰dhy优惠大厅(中国)有限公司 Business Field of 大红鹰dhy优惠大厅(中国)有限公司 PBOC (Draft for Comment)

On July 24, 2023, 大红鹰dhy优惠大厅(中国)有限公司 PBOC issued 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Data Security in 大红鹰dhy优惠大厅(中国)有限公司 Business Field of 大红鹰dhy优惠大厅(中国)有限公司 PBOC (Draft for Comment) (大红鹰dhy优惠大厅(中国)有限公司 "Administrative Measures"). 大红鹰dhy优惠大厅(中国)有限公司 scope of application of 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures is 大红鹰dhy优惠大厅(中国)有限公司 data processing activities related to various types of businesses conducted within China that 大红鹰dhy优惠大厅(中国)有限公司 PBOC undertakes to supervise and manage. 大红鹰dhy优惠大厅(中国)有限公司 main content of 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures includes: (1) standardizing requirements for data classification and grading, specifying that data is divided into three levels: general data, important data, and core data; (2) proposing overall requirements for data security protection; (3) specifying 大红鹰dhy优惠大厅(中国)有限公司 baseline requirements of security compliance for 大红鹰dhy优惠大厅(中国)有限公司 full process of data processing activities; (4) detailing compliance requirements for risk monitoring, assessment and audit, and incident handling measures, etc.; (5) clarifying 大红鹰dhy优惠大厅(中国)有限公司 PBOC's regulatory measures and 大红鹰dhy优惠大厅(中国)有限公司 legal responsibilities of data processors in cases of violation. Additionally, it is worth noting that 大红鹰dhy优惠大厅(中国)有限公司 draft explanation of 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures points out that clauses such as "important data shall be stored within 大红鹰dhy优惠大厅(中国)有限公司 territory of PRC" and "declaring security assessments for cross-border transfer of data under prescribed circumstances" are reiterations of legal obligations expressly provided by 大红鹰dhy优惠大厅(中国)有限公司 promulgated higher-level laws, and without imposing additional compliance requirements.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures fully articulate related laws and regulations such as 大红鹰dhy优惠大厅(中国)有限公司 Data Security Law, detailing and clarifying 大红鹰dhy优惠大厅(中国)有限公司 baseline requirements for data security compliance in 大红鹰dhy优惠大厅(中国)有限公司 PBOC's business field. They are important supplements to 大红鹰dhy优惠大厅(中国)有限公司 data security management system in 大红鹰dhy优惠大厅(中国)有限公司 financial industry, providing a regulatory basis for data security management by data processors in banking industry within 大红鹰dhy优惠大厅(中国)有限公司 PRC. Furthermore, according to 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures and its drafting explanation, 大红鹰dhy优惠大厅(中国)有限公司 PBOC may issue other detailed regulations on matters related to 大红鹰dhy优惠大厅(中国)有限公司 protection of personal information in 大红鹰dhy优惠大厅(中国)有限公司 business field of 大红鹰dhy优惠大厅(中国)有限公司 PBOC in 大红鹰dhy优惠大厅(中国)有限公司 future.

7. NAFR Issued 大红鹰dhy优惠大厅(中国)有限公司 Implementation Measures for Administrative Licensing of Non-Bank Financial Institutions (Draft for Comment)

On July 21, 2023, 大红鹰dhy优惠大厅(中国)有限公司 NAFR formulated and revised 大红鹰dhy优惠大厅(中国)有限公司 Implementation Measures for Administrative Licensing of Non-Bank Financial Institutions (Draft for Comment) (大红鹰dhy优惠大厅(中国)有限公司 “Implementation Measures”). 大红鹰dhy优惠大厅(中国)有限公司 revisions involved focus on 大红鹰dhy优惠大厅(中国)有限公司 following three aspects:

(1) adjustment of certain administrative licensing conditions: in conjunction with 大红鹰dhy优惠大厅(中国)有限公司 recent revisions to 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Corporate Group Finance Companies and 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Automobile Finance Companies, synchronizing 大红鹰dhy优惠大厅(中国)有限公司 adjustment of entry standards for institution establishment and business qualification approvals; and pursuant to 大红鹰dhy优惠大厅(中国)有限公司 Guiding Opinions on Strengthening 大红鹰dhy优惠大厅(中国)有限公司 Supervision of Non-financial Enterprises Investing in Financial Institutions, moderately increasing 大红鹰dhy优惠大厅(中国)有限公司 net asset ratio requirements for non-financial enterprises acting as controlling shareholders of non-bank institutions, and implementing it in accordance with 大红鹰dhy优惠大厅(中国)有限公司 principle of 大红鹰dhy优惠大厅(中国)有限公司 old-versus-new divide;

(2) implementation of expanded foreign opening deployment: abolishing 大红鹰dhy优惠大厅(中国)有限公司 restriction that overseas non-financial institutions cannot be shareholders of financial asset management companies; cancelling 大红鹰dhy优惠大厅(中国)有限公司 total asset requirements for overseas financial institutions acting as shareholders of financial asset management companies; cancelling 大红鹰dhy优惠大厅(中国)有限公司 total asset requirements for overseas financial institutions to invest in finance companies as strategic investors, and allowing multinational groups to directly initiate 大红鹰dhy优惠大厅(中国)有限公司 establishment of foreign-funded finance companies; cancelling 大红鹰dhy优惠大厅(中国)有限公司 total asset requirements for domestic and foreign non-financial institutions acting as shareholders of automobile finance companies, and adjusting such requirements to 大红鹰dhy优惠大厅(中国)有限公司 relevant prudential conditions;

(3) advancement of simplifying administration and delegating power: abolishing 大红鹰dhy优惠大厅(中国)有限公司 administrative approval of non-bank institutions issuing non-capital bonds, replacing it with a reporting process; and establishing 大红鹰dhy优惠大厅(中国)有限公司 shelf issuance mechanism for capital bonds.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Implementation Measures align with newly introduced regulatory systems and policy orientation requirements in recent years, aiming to further strengthen regulatory policy guidance, enhance 大红鹰dhy优惠大厅(中国)有限公司 quality and efficiency of entry regulation, implement 大红鹰dhy优惠大厅(中国)有限公司 simplification of administration and 大红鹰dhy优惠大厅(中国)有限公司 delegation of power, and fulfill 大红鹰dhy优惠大厅(中国)有限公司 deployment for opening up, which will help to fully stimulate 大红鹰dhy优惠大厅(中国)有限公司 market vitality of non-bank institutions.

8. SAC Issued 大红鹰dhy优惠大厅(中国)有限公司 Implementation Rules for Integrity Practice of Securities Operators and Their Staffs

On July 21, 2023, 大红鹰dhy优惠大厅(中国)有限公司 SAC modified 大红鹰dhy优惠大厅(中国)有限公司 Implementation Rules for Integrity Practice of Securities Operators and Their Staffs implemented in 2020, and released 大红鹰dhy优惠大厅(中国)有限公司 revised version (“New Implementation Rules”).

大红鹰dhy优惠大厅(中国)有限公司 main content of 大红鹰dhy优惠大厅(中国)有限公司 New Implementation Rules includes: (1) further clarifying and improving internal control mechanisms, emphasizing that securities operators should establish and improve 大红鹰dhy优惠大厅(中国)有限公司 leadership mechanism and basic institutional arrangements for management of integrity practice at 大红鹰dhy优惠大厅(中国)有限公司 company level, and requiring that 大红鹰dhy优惠大厅(中国)有限公司 related working papers for 大红鹰dhy优惠大厅(中国)有限公司 prevention and control of risks in integrity practice be retained by securities operators for no less than 10 years; (2) introducing more specific and detailed regulations for integrity practice in key risk areas for securities operators and their staffs while carrying out securities business activities; (3) strengthening self-discipline management, explicitly incorporating 大红鹰dhy优惠大厅(中国)有限公司 situation of integrity practice into 大红鹰dhy优惠大厅(中国)有限公司 scope of business inspection, improving management measures, and enhancing 大红鹰dhy优惠大厅(中国)有限公司 enforceability of 大红鹰dhy优惠大厅(中国)有限公司 rules.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 introduction of 大红鹰dhy优惠大厅(中国)有限公司 New Implementation Rules helps to enhance 大红鹰dhy优惠大厅(中国)有限公司 implementation of 大红鹰dhy优惠大厅(中国)有限公司 integrity system, promote 大红鹰dhy优惠大厅(中国)有限公司 implementation of 大红鹰dhy优惠大厅(中国)有限公司 requirements for building an integrity ecosystem within 大红鹰dhy优惠大厅(中国)有限公司 securities industry institutions, and continuously foster 大红鹰dhy优惠大厅(中国)有限公司 culture of integrity in 大红鹰dhy优惠大厅(中国)有限公司 securities industry.

9.NAFR Released 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment)

On July 28, 2023, 大红鹰dhy优惠大厅(中国)有限公司 NAFR issued 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment), 大红鹰dhy优惠大厅(中国)有限公司 main content of which includes: (1) clarifying risk governance and management responsibilities, such as defining 大红鹰dhy优惠大厅(中国)有限公司 specific scope and responsibilities of 大红鹰dhy优惠大厅(中国)有限公司 three lines of defense in operational risk management, emphasizing that 大红鹰dhy优惠大厅(中国)有限公司 three lines of defense, as well as within each line of defense, should establish and improve 大红鹰dhy优惠大厅(中国)有限公司 mechanisms for sharing risk data and information; (2) setting basic requirements for risk management, specifying that banking and insurance institutions should establish basic operational risk management systems, preferences and transmission mechanisms for operational risk, build robust management information systems, and foster a positive management culture; (3) detailing management processes and tools, including explicitly making data security management one of 大红鹰dhy优惠大厅(中国)有限公司 risk management processes and methods; (4) improving 大红鹰dhy优惠大厅(中国)有限公司 supervisory and management responsibilities of 大红鹰dhy优惠大厅(中国)有限公司 NAFR and industry associations.

Haiwen Comments

Operational risk is one of 大红鹰dhy优惠大厅(中国)有限公司 main risks faced by banking and insurance institutions in their business management. 大红鹰dhy优惠大厅(中国)有限公司 Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment) unify 大红鹰dhy优惠大厅(中国)有限公司 requirements for operational risk management across various types of banking and insurance institutions, retaining existing good rules and practices, and also introducing more comprehensive and specific requirements in response to issues exposed in practice, and 大红鹰dhy优惠大厅(中国)有限公司 "matching principle" proposed therein also reflects 大红鹰dhy优惠大厅(中国)有限公司 overall idea of differentiated supervision.

10. AMAC Released 大红鹰dhy优惠大厅(中国)有限公司 Guidelines for Handling 大红鹰dhy优惠大厅(中国)有限公司 Disappearance of Private Fund Managers

On July 14, 2023, 大红鹰dhy优惠大厅(中国)有限公司 AMAC released 大红鹰dhy优惠大厅(中国)有限公司 Guidelines for Handling 大红鹰dhy优惠大厅(中国)有限公司 Disappearance of Private Fund Managers (大红鹰dhy优惠大厅(中国)有限公司 “Guidelines”), to sort out, standardize, and optimize 大红鹰dhy优惠大厅(中国)有限公司 process for handling 大红鹰dhy优惠大厅(中国)有限公司 disappearance of fund managers, 大红鹰dhy优惠大厅(中国)有限公司 main content thereof includes, among others, (1) shortening 大红鹰dhy优惠大厅(中国)有限公司 period for public announcement of disappearance (from 3 months to 1 month); (2) adjusting 大红鹰dhy优惠大厅(中国)有限公司 current practice of suspected disappearance announcements to requiring relevant institutions to promptly report 大红鹰dhy优惠大厅(中国)有限公司 situation to 大红鹰dhy优惠大厅(中国)有限公司 AMAC, reasonably reducing market impact; (3) strengthening 大红鹰dhy优惠大厅(中国)有限公司 punishment measures against fund managers disappeared, etc.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Guidelines further standardize 大红鹰dhy优惠大厅(中国)有限公司 handling process of 大红鹰dhy优惠大厅(中国)有限公司 disappearance of fund managers and are conducive to protecting 大红鹰dhy优惠大厅(中国)有限公司 rights and interests of investors. Meanwhile, we also advise fund managers to promptly update 大红鹰dhy优惠大厅(中国)有限公司 contact information on record with 大红鹰dhy优惠大厅(中国)有限公司 AMAC, and regularly pay attention to various communication information to avoid missing feedback.

11. AMAC Released 大红鹰dhy优惠大厅(中国)有限公司 Self-Regulatory Inspection Rules of 大红鹰dhy优惠大厅(中国)有限公司 AMAC

On July 14, 2023, 大红鹰dhy优惠大厅(中国)有限公司 AMAC released 大红鹰dhy优惠大厅(中国)有限公司 Self-Regulatory Inspection Rules of 大红鹰dhy优惠大厅(中国)有限公司 AMAC (“Inspection Rules”), which revised 大红鹰dhy优惠大厅(中国)有限公司 "Self-Regulatory Inspection Rules of 大红鹰dhy优惠大厅(中国)有限公司 AMAC (Trial)" and detailed 大红鹰dhy优惠大厅(中国)有限公司 specific requirements for 大红鹰dhy优惠大厅(中国)有限公司 implementation of on-site and off-site inspections by 大红鹰dhy优惠大厅(中国)有限公司 AMAC on private fund managers and their practitioners and other self-regulatory targets.

Haiwen Comments

大红鹰dhy优惠大厅(中国)有限公司 Inspection Rules further improve 大红鹰dhy优惠大厅(中国)有限公司 self-regulatory management mechanism of 大红鹰dhy优惠大厅(中国)有限公司 AMAC, helping to combat illegal and irregular behaviors within 大红鹰dhy优惠大厅(中国)有限公司 industry and maintain good industry order.

II Industry News

1.Three Financial Regulatory Authorities Released "Urge Rectification of Platform Enterprises’ Financial Business and Improved Normalized Regulation"

On July 7, 2023, 大红鹰dhy优惠大厅(中国)有限公司 PBOC, 大红鹰dhy优惠大厅(中国)有限公司 NAFR, and 大红鹰dhy优惠大厅(中国)有限公司 CSRC published an article titled "Urge Rectification of Platform Enterprises’ Financial Business and Improved Normalized Regulation" on their respective official websites. 大红鹰dhy优惠大厅(中国)有限公司 article stated that most of 大红鹰dhy优惠大厅(中国)有限公司 prominent issues existing in 大红鹰dhy优惠大厅(中国)有限公司 platform enterprises’ financial business have been rectified, and 大红鹰dhy优惠大厅(中国)有限公司 priority of 大红鹰dhy优惠大厅(中国)有限公司 financial regulatory authorities will shift from centralized rectification to normalized regulation. In 大红鹰dhy优惠大厅(中国)有限公司 next step, 大红鹰dhy优惠大厅(中国)有限公司 financial regulatory authorities will step up efforts to upgrade normalized regulation, all types of financial activities will be subject to regulation in accordance with 大红鹰dhy优惠大厅(中国)有限公司 law, and 大红鹰dhy优惠大厅(中国)有限公司 same regulatory rules will be applied to 大红鹰dhy优惠大厅(中国)有限公司 same type of businesses so as to achieve fair regulation; and will implement financial policies and measures to promote 大红鹰dhy优惠大厅(中国)有限公司 healthy development of 大红鹰dhy优惠大厅(中国)有限公司 platform economy, to further strengthen their inclusive financial services, to boost technological and financial innovation and to enhance their international competitiveness so as to better support development of 大红鹰dhy优惠大厅(中国)有限公司 real economy and to meet 大红鹰dhy优惠大厅(中国)有限公司 needs of 大红鹰dhy优惠大厅(中国)有限公司 people’s livelihood.

2. CSRC Answered Questions on Publicly Offered Fund Fees Reform

On July 8, 2023, 大红鹰dhy优惠大厅(中国)有限公司 first batch of 19 major public fund management companies, including E Funds, China Asset Management, Zhong Ou AMC, Harvest Fund, and BOCOM Schroders, announced that they would reduce 大红鹰dhy优惠大厅(中国)有限公司 fees and custody rates for some of their equity funds. On 大红鹰dhy优惠大厅(中国)有限公司 same day, 大红鹰dhy优惠大厅(中国)有限公司 head of 大红鹰dhy优惠大厅(中国)有限公司 relevant department of 大红鹰dhy优惠大厅(中国)有限公司 CSRC also clarified on 大红鹰dhy优惠大厅(中国)有限公司 Q&A session re publicly offered fund fees reform that 大红鹰dhy优惠大厅(中国)有限公司 CSRC has formulated a work plan for publicly offered fund industry fees reform. 大红鹰dhy优惠大厅(中国)有限公司 CSRC will further comprehensively optimize 大红鹰dhy优惠大厅(中国)有限公司 publicly offered fund fees model, steadily reduce 大红鹰dhy优惠大厅(中国)有限公司 overall fee level of 大红鹰dhy优惠大厅(中国)有限公司 industry, and gradually establish and improve a mechanism suitable for China's national and market conditions, and in line with 大红鹰dhy优惠大厅(中国)有限公司 development stage of China's publicly offered fund industry, to promote 大红鹰dhy优惠大厅(中国)有限公司 healthy development of 大红鹰dhy优惠大厅(中国)有限公司 industry and make it more consistent with 大红鹰dhy优惠大厅(中国)有限公司 interests of investors.

Following 大红鹰dhy优惠大厅(中国)有限公司 implementation of fee reductions of 大红鹰dhy优惠大厅(中国)有限公司 above 19 major public fund management companies, a number of other fund management companies also taken steps towards similar fee reduction actions.

Author

Julia ZHANG

Mergers & Acquisitions，Private Equity，Asset Management，General Corporate Practice

WEI, Shuangjuan

Capital Markets，Mergers & Acquisitions，Private Equity，Fund Formation

HUANG, Shudan

Mergers & Acquisitions，Asset Management，Anti-Corruption & Compliance