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Revised Funds Law to take effect on 1 June 2013  

08 January 2013

Following public consultation on the draft revision of the Securities Investment Funds Law (the “Consultation Draft”) (see the PRC Financial Market Alert dated 26 July 2012), on 28 December 2012, the Standing Committee of the National People’s Congress (the “NPC”) released the final revised Securities Investment Funds Law (the “New Fund Law”). The New Fund Law will come into effect on 1 June 2013.

The New Fund Law will for the first time regulate certain private funds in addition to mutual funds. That said, private equity and venture capital funds (the “PE/VC”) will remain beyond the scope of the New Fund Law.


  • Private funds: Private funds that are regulated under the New Fund Law are funds which are offered to 200 or fewer qualified investors and which trade in publicly offered shares, bonds and fund units and other securities and derivatives approved by the China Securities Regulatory Commission (the “CSRC”). Whilst the Consultation Draft provided that private funds could invest in both listed shares and unlisted shares, the New Fund Law no longer contemplates investment in unlisted shares by private funds and hence PE/VC, which generally invest in shares of unlisted companies, will remain outside of the scope of the New Fund Law.
  • Relaxing private funds’ registration/filing obligations: Under the Consultation Draft, a fund manager of a private fund was required to register with the CSRC or make a filing with the Asset Management Association of China (the “Fund Association”). The New Fund Law requires only filing with the Fund Association. Similarly, the requirement under the Consultation Draft to make a post-launch filing with the CSRC has also been removed and managers of private funds are merely required to make this filing with the Fund Association.
  • Simplifying forms of funds: The Consultation Draft expressly provided for council form funds and unlimited liability form funds on top of contractual form funds. The New Fund Law simplifies this and allows these structures to be achieved under the umbrella of contractual form funds.

Securities Investment Funds Law of the People’s Republic of China (《中华人民共和国证券投资基金法》)Issuing authority: Standing Committee of the National People’s Congress.

Any queries can be directed to Fang Jian, Annabella Fu or your usual Linklaters contact.

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