A draft amendment on China’s securities investment fund law, which includes regulation on private equity funds, has been submitted to the National People’s Congress, according to a Xinhua News Agency report.
The amendment aims to regulate the establishment and operation of these funds, noted the report, citing Xiaoling Wu, vice chairman of the financial and economic committee of the National People’s Congress.
Currently, the securities fund law lacks specific fundraising regulations. Therefore during investment and fundraising activities private equity funds are more likely to conflict with investors' interests, Wu said, adding unregulated fund activities can also create social and economic risks.
Last year, the National Development and Reform Commission issued a circular that laid down the foundation for regulating private equity funds. It was the first countrywide set of administrative rules which guide the formation and operation of these funds, sister title PE Asia previously reported.
Xianglong Dai, chairman of the National Council for Social Security Fund, also told the domestic private equity industry that they need more regulation and a governing structure at industry conferences earlier this year.