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Ten typical cases involving private equity funds

Joint selection of Shanghai Securities Regulatory Bureau and Shanghai Financial Court

In order to study, publicize and implement the spirit of the central financial work conference, promote the standardized operation and healthy development of the private equity fund industry, and give full play to its positive role in serving the real economy, Shanghai Securities Regulatory Bureau and Shanghai Financial Court jointly selected and compiledWwwbaccaratcomTen typical cases involving private equity funds have been released to all sectors of the community.

At the same time, on September 1, 2023, the regulations on the Supervision and Administration of Private Investment funds (hereinafter referred to as "regulations") were formally implemented. It is hoped that by publishing typical cases involving private equity funds, we will further guide the legal operation of the private equity industry, maintain the order of the capital market, better implement the spirit of the relevant provisions of the regulations, and co-ordinate development and safety. we will combine standardized supervision with respect for market laws to promote the high-quality development of the private equity fund industry.

Against the violation of a certain Kun asset management company

Private placement laws and regulations to impose administrative penalties

I. basic case

In the process of private equity fund raising, sales and investment operation, a certain Kun asset management company has the following illegal facts:

The first is to introduce private equity funds to investors whose risk identification ability and risk-bearing ability do not match. The company evaluates the risk level of fund products as R3, but in fact, the product invests in the equity of non-listed companies, the liquidity is poor, and the risk level should be higher than R3. Some of the investors who are recommended and sold in the above-mentioned funds are C3 stable investors, and their risk identification ability and risk-bearing ability do not match the actual risk level of the fund.

Second, the obligation of information disclosure has not been fulfilled in accordance with the contract. A total of 22 product fund contracts of the company clearly stipulate the way of information disclosure, and the company does not disclose information to investors in the way agreed in the contract; in the company's four product fund contracts, fund managers shall disclose to investors important information such as related party transactions that may affect the legitimate rights and interests of investors. The projects invested in by the above-mentioned products involve a number of related transactions between the company and its related parties. A number of annual reports and semi-annual reports produced by the company do not disclose related relations and related transactions to investors.

Lin has been the general manager of the company since January 2016 and the legal representative and chairman of the company since October 2018. He is the person directly responsible for the above violations.

Second, processing results

On December 28, 2022, the Shanghai Securities Regulatory Bureau made an administrative penalty decision. It was found that the above two acts of a certain Kun Asset Management Company violated the provisions of articles 17 and 24 of the interim measures for the Supervision and Administration of Private Investment funds (hereinafter referred to as the "Private offering measures"). According to the provisions of Article 38 of the "Private placement measures", the Shanghai Securities Regulatory Bureau ordered the asset management company to correct, give a warning and deal with 45. Lin was given a warning and fined 45000 yuan.

III. Regulatory warning

1. Managers should be careful and diligent, earnestly fulfill their investor appropriateness management obligations and ensure that appropriate products are sold to qualified investors. Investor appropriateness management system helps investors to identify risks and reduce damage beyond their ability to bear risks. This case imposes administrative penalties on private equity fund managers to recommend private equity funds to investors who do not match their risk identification ability and risk-bearing ability, and compacts the responsibility of private equity institutions to effectively perform various appropriateness management obligations. Effectively protect investors who are in a weak position in terms of product information acquisition and product risk awareness.

2. The manager shall be honest and trustworthy, fully disclose information in accordance with the agreement, and standardize related party transactions. In a series of risk events in the field of asset management in recent years, managers seriously deviate from their fiduciary obligations and seek personal illegal interests through illegal means such as improper related party transactions and benefit transfer to related parties, which seriously affects the credibility of the industry and the confidence of investors. This case imposes administrative penalties on private equity fund managers for failing to disclose information to investors in the way agreed in the contract and failing to disclose related relations and related transactions to investors in accordance with the contractual agreement. warn managers to timely and comprehensively disclose major information affecting the rights and interests of investors, improve related party transaction decision-making procedures and other internal management systems, and constantly enhance the transparency of fund management and operation.

3. Investors should establish risk awareness, invest cautiously and rationally, and safeguard their own rights and interests. Private equity industry as a high degree of market-oriented development of the field, managers are mixed. The violations in this case occurred in the stage of fund-raising and investment operation, and are closely related to investors. Investors should firmly establish a sense of risk, invest cautiously and rationally, actively understand the basic laws and regulations of private equity funds, and fully understand the basic information of private equity fund managers by consulting the website of the China Foundation Association. and on the basis of fully understanding the risks of private equity products, carefully choose products that match their risk tolerance.