Jul 2016 , Issue 1
Entry ban lifted for wholly foreign-owned enterprises (WFOEs) and joint ventures (JVs) engaging in private securities investment fund management business in China
On 30 June 2016, the Asset Management Association of China (AMAC) released a 10th FAQ Regarding the Registration and Record-Filing of Private Funds (FAQ No.10), confirming that foreign financial institutions are permitted to engage in private securities investment fund management business in China via setting up WFOEs or JVs. The FAQ No. 10 also elaborates the qualification criteria for WFOEs and JVs participating in such business as well as the registration and record-filing requirements.
In this News Flash, we will highlight the background of FAQ No. 10, summarise the criteria for qualified WFOEs and JVs, and share our observations on some practical issues. Foreign financial institutions that consider entering the Chinese private securities market as a fund manager should assess the impact of this development and make commercial adjustment to fulfil the criteria where necessary.