Private Placement Disclosure Rules Soliciting Opinions Strengthen Penetration Disclosure to Ensure Authenticity

On March 13, the China Securities Investment Fund Association released the "Detailed Rules for the Implementation of Information Disclosure of Private Investment Funds" and the "Important Content Template for Information Disclosure of Private Investment Funds", soliciting public opinions from the society. This revision aims to implement the China Securities Regulatory Commission's "Administrative Measures for Information Disclosure of Private Investment Funds", by refining disclosure standards, strengthening transparency requirements, improving self-regulation mechanisms, and promoting the standardized development of the private equity fund industry to effectively protect the legitimate rights and interests of investors. The new regulations differentiate the periodic reporting disclosure requirements for private securities funds and private equity funds. Private securities funds are required to disclose details such as net asset value, financial condition, leverage ratio, related party transactions, and cross-border investments. In the case of nested investments, they must disclose the asset categories, amounts, and proportions calculated after consolidation. Assets exceeding a certain percentage of net assets must be separately disclosed. Regarding cross-border investments, disclosure of scale, methods, and pathways is required. The audit standards have been clarified as well. If illiquid assets at the end of the quarter and proportions of New Third Board stocks, off-exchange derivative assets, overseas assets, or private equity funds managed by other managers exceed 60% individually or collectively, the annual report must be audited by an accounting firm compliant with the Securities Law.