The Asset Management Association of China (AMAC) has recently issued the Guidelines for the Operation of Private Securities Investment Funds (the "Guidelines"), effective from August 1, 2024.
The Guidelines mainly involve: (1) tightening fundraising requirements, clarifying the initial fundraising and scale of existence for private securities investment funds, imposing higher requirements on investor suitability, and specifying the arrangements for warning lines and stop-loss lines; (2) regulating investment operation, clarifying requirements for investment strategy consistency, stressing portfolio investment, prohibiting multi-level nesting, standardizing bond investment, over-the-counter derivatives transactions and programmatic transactions, establishing sound internal control systems, strengthening liquidity management, and clarifying information disclosure requirements; (3) emphasizing the duties of entrusted management, prohibiting disguised guarantee of principal and returns, expressly prohibiting channel services or the circumvention of regulatory requirements by way of over-the-counter derivatives, asset management products or others, standardizing the accrual of performance-based remuneration, and ensuring fair treatment of investors; (4) establishing the concept of long-term investment and value investment, standardizing the display of past performance, guiding investors to pay attention to long-term performance, and strengthening the management of short-term investment behavior; and (5) granting a reasonable transition period.