Before the holiday, the website of the Asset Management Association of China (hereinafter referred to as the "Association") published several disciplinary decisions, disclosing the violations of several private fund managers. For example, Shanghai SanShang Asset Management Co., Ltd. (hereinafter referred to as "Shanghai SanShang") had been engaged in business related to the financial exchange, among others; Guangdong Gaia Investment Management Co., Ltd. (hereinafter referred to as "Guangdong Gaia") had its senior executives sentenced to penalties, but the company did not disclose this to investors; Guangdong BaiShiFu Equity Investment Fund Management Co., Ltd. (hereinafter referred to as "Guangdong BaiShiFu") had some products with asset proof not meeting the requirements and induced investors to achieve the expected risk assessment results.
Ultimately, all three private institutions were publicly reprimanded, and Shanghai SanShang was also suspended from accepting private fund product records for twelve months.
Shanghai SanShang, which engaged in business related to the financial exchange and other violations, was suspended from product recordation for one year.
The disciplinary decision shows that Shanghai SanShang had been engaged in business related to the financial exchange and other businesses unrelated to private funds, which raised issues of non-specialized operations.
On December 30, 2020, the China Securities Regulatory Commission (CSRC) issued the "Several Provisions on Strengthening the Supervision of Private Investment Funds" (hereinafter referred to as the "Regulations"), where Article 4 stipulates that private fund managers shall not engage in businesses unrelated to private funds, and Article 14 stipulates that those who do not comply with Article 4 should complete rectification within one year from the date of implementation of these regulations. However, according to Shanghai SanShang's own admission, it continued to engage in financial exchange business and provided custody and underwriting services to relevant issuers, charging corresponding service fees, during the rectification period after the issuance of the "Regulations."
The Association stated that the above actions violated Article 8 of the "Guidelines for Internal Control of Private Investment Fund Managers."
In addition, according to the regulatory authority's regulatory measures decision, Shanghai SanShang also had the following violations: first, entrusting units or individuals without fund sales business qualifications to engage in fund-raising activities; second, entrusting others to create and collect some investor appropriateness materials, not informing investors of the determination results of some professional investors, and not fulfilling the appropriateness obligations of informing and warning as ordinary investors, failing to act diligently and prudently in the appropriateness management process.
The Association decided to take the following disciplinary actions: publicly reprimand Shanghai SanShang and suspend the acceptance of private fund product records for twelve months.
Data shows that Shanghai SanShang was established in April 2015 and was registered as a private securities investment fund manager in October of the same year, with a current management scale of 500 million to 1 billion yuan.Senior executives were sentenced to prison without informing investors; Guangdong Gaia was publicly reprimanded.
Another private equity institution, Guangdong Gaia, has committed multiple violations:
Firstly, there was a failure to fulfill the obligation of timely information disclosure. Senior executives of Guangdong Gaia were sentenced to prison, but the company did not disclose this matter to investors.
The association stated that the above actions violated Article 18, Item (12) of the "Private Investment Fund Information Disclosure Management Measures."
Secondly, significant matters were not reported in a timely manner. Firstly, senior executives of Guangdong Gaia were sentenced to prison, and the company did not report this matter to the association; secondly, according to the statement of Guangdong Gaia, the current compliance and risk control officer took office in January 2023, but it was not until November 2023 that Guangdong Gaia applied to the association to update the senior executive information.
The association believes that the aforementioned actions violated Articles 21 and 22 of the "Private Investment Fund Manager Registration and Fund Filing Measures (Trial)."
The association decided to impose the following disciplinary action: to publicly reprimand Guangdong Gaia.
Information shows that Guangdong Gaia was established in August 2012 and completed the registration of private equity and venture capital fund managers in April 2015. The current management scale range is 0-500 million yuan.
Asset certification does not meet requirements, risk assessment contains inducement; Guangdong Bai Shifu was also publicly reprimanded.
The disciplinary decision also shows that Guangdong Bai Shifu has three violations:Firstly, there is a failure to disclose information as agreed upon or stipulated. Shenzhen Cenergy Investment Partnership (Limited Partnership) (hereinafter referred to as Shenzhen Cenergy), Shenzhen Yunke Rongda Investment Partnership (Limited Partnership), and Shenzhen Shengtai No.1 Investment Partnership (Limited Partnership) (hereinafter referred to as Shengtai No.1) are three private fund products managed by Guangdong Baisifu Management. According to the situation explanation they provided to the association, Guangdong Baisifu and investors agreed that the method of information disclosure would be through the association's private fund information disclosure backup system.
However, as of November 2023, there is no record in the information disclosure backup system of Guangdong Baisifu disclosing information to the investors of the aforementioned three products: Liaoning Liaohe Dali Industrial Co., Ltd., Suzhou Baoping Trading Partnership (Limited Partnership), and Guangzhou Dacang Industrial Co., Ltd. The above behavior violates the provisions of Article 3 of the "Private Investment Fund Information Disclosure Management Measures."
Secondly, some product asset proof documents do not meet the requirements. The investor asset proof documents provided by Guangdong Baisifu for Shenzhen Cenergy, Shengtai No.1, and Shenzhen Baisifu New Generation Information Technology Investment Partnership (Limited Partnership) are actual capital contribution materials. These actual capital contribution materials show that the investors of the three products are institutional investors with actual contributions below 10 million yuan. Since the actual capital contribution materials cannot prove the net asset status of the institutions, the asset proof documents do not meet the qualified investor recognition standards. The above behavior violates the provisions of Article 28 of the "Private Investment Fund Raising Behavior Management Measures."
Thirdly, the risk assessment is not standardized. The investor risk assessment questionnaire of Shenzhen Future Beautiful Investment Partnership (Limited Partnership) is marked with the score value of each question, the scoring range corresponding to the risk type, and prompts or induces investors to achieve the expected risk tolerance assessment result. The above behavior violates the provisions of Article 27 of the "Guidelines for the Implementation of Investor Appropriateness Management by Fund Raising Institutions (Trial)."
The association decided to impose the following disciplinary action: public censure of Guangdong Baisifu.
According to the information, Guangdong Baisifu was established in March 2018, registered with the record in March 2020, the institution type is a private equity and venture capital fund manager, and the current management scale range is 0-500 million yuan.