CHINA Law and Practice Contributed by: Alan Du and Yiwei Shi, King & Wood Mallesons
(b) insurance asset management companies; (c) wealth management subsidiaries of com - mercial banks; or (d) private securities investment fund man - agers. In May 2022, the CSRC released Measures for Supervision and Administration of Public Secu - rities Investment Fund Managers (effective on 20 June 2022) and supplementing rules, which impose stricter requirements for setting up a public fund manager (such as a higher require - ment regarding financial status of the major shareholders of a newly established public fund manager). Setting up a new public fund management company To set up a public fund management company, approval of the CSRC must first be obtained after satisfying various strict requirements. High- standard requirements also apply to the com - pany’s major shareholders in respect of their registered capital, net asset scales, etc. After the submission of the application docu - ments, the CSRC may require the applicant to supplement the documents before it accepts the application. Once the application documents are accepted, the CSRC shall decide whether to issue the approval within six months. In prac - tice, it is hard to obtain approval from the CSRC, which determines whether to grant the approval on a discretionary basis. Therefore, the actual time for obtaining approval is uncertain, depend - ing on the background of the prospective share - holders of the fund manager, etc. Within 30 days of receipt of the CSRC’s approv - al, the applicant must register the fund man - agement company with the AMR. The new fund
management company is established upon the issuance of a business licence by the AMR. After the establishment of the fund management company, the company must prepare for opera - tion by satisfying various requirements regard - ing its office, IT system, employees, etc, to be inspected by the CSRC. The preparation period may last as long as six months or so. The public fund management company may only start busi - ness operations after passing the inspection by the CSRC. Public fund manager licence for existing institutions Subject to certain conditions, asset manage - ment institutions (such as asset management subsidiaries of securities companies and insur - ance asset management companies, wealth management subsidiaries of commercial banks, or private securities investment fund manag - ers) can also apply for the public fund manager licence from the CSRC. In general, an applicant must fulfil the following conditions: • at least three years’ management experience of securities assets with good performance; • sound corporate governance, with a sophisti - cated internal mechanism and effective risk- control system; • good business performance and financial standing for the last three years; • no significant violation of the applicable laws and regulations; and • the number of employees who have obtained the qualification for fund practice must not be less than 30 in principle.
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