On June 5, 2026, the General Office of the State Council issued the Guidance on Strengthening Supervision, Preventing Risks, and Promoting the High-Quality Development of the Private Investment Fund Industry ([2026] No. 54, the “Guidance”). As an overarching policy document under the “1+N+X” regulatory framework for the private fund industry, the Guidance outlines the high-level regulatory guidance and directions to address common issues such as incomplete qualification review mechanism, insufficient supervision, incomplete regulatory framework, insufficient central‑local governments coordination, and the misuse of certain private funds as vehicles for illegal activities or even corruptions. This policy aims to establish a long-term and system-based framework for enhanced regulation and risk prevention, while promoting the sound development of the private fund industry.
This briefing analyzes the key provisions of the Guidance specifically from the perspective of private securities investment funds.
I. Tightened Qualification Review
The Guidance sets out stringent qualification review mechanism by establishing dual reviews consisting of: (i) a multi-authority joint review prior to the manager corporate entity registration (the “Joint Review”), and (ii) the review for the private fund manager (PFM) registration and private fund filing (“PFM Registration and Fund Filing”).
The Guidance expands the Joint Review practice, previously piloted in Shenzhen, Zhejiang, Hainan and some other regions, to a national level. It requires the local financial regulatory departments and the dispatched offices of the China Securities Regulatory Commission (CSRC) to streamline information sharing and work coordination. As a result, any private fund manager applicant must pass the Joint Review conducted by the local financial regulatory departments and the CSRC dispatched offices before it is eligible to apply for corporate entity registration or use “private fund” or similar wording in its corporate name or business scope.
The Guidance also aims to strengthen the review standards for the PFM Registration and Fund Filing. The regulatory authorities will further refine the relevant registration and filing rules to prevent any institutions and products that are inconsistent with the nature and operational norms of private funds from being registered or filed as such.
For existing non-compliant institutions, the regulatory authorities will adopt measures depending on specific circumstances:
1) For private fund managers that continuously fail to meet the registration requirements due to abnormal operations or fail to engage in actual business or have been out of contact for certain period of time, the regulatory authorities will revoke their registration within a prescribed time limit if they fail to rectify as required.
2) The regulatory authorities will urge institutions that fail to apply for PFM registration and fund filing as required, fail to meet the PFM registration or fund filing requirements upon review, have had their PFM registration revoked, or have completed liquidation of all funds under their management, to voluntarily cancel or amend their PFM registrations. If these institutions fail to do so, the local AMR may take measures including substituting the enterprise name using the Unified Social Credit Code, adding special markings to their profiles in the National Enterprise Credit Information Publicity System, or mandatorily revoking their business licenses.
The Guidance prohibits delegating authority of Joint Review to lower-level local governments, stipulating that only a provincial level local financial regulatory authority or any of the five independent planned cities (i.e., Shenzhen, Dalian, Qingdao, Ningbo and Xiamen) are authorized to conduct the Joint Review.
II.Tiered and Categorized Supervision
The Guidance introduces a tiered and categorized supervision mechanism. Under this mechanism, the risk assessment criteria for private funds will be further refined, and differentiated regulatory measures will be applied to private fund managers, based on their risk profiles. Key focus private fund managers will be subject to more frequent on-site regulatory inspections. Joint inspections carried out by the local financial regulatory authorities and the CSRC dispatched offices will also be strengthened. Enhanced cross‑jurisdictional joint inspections may be imposed if a private fund manager, its fund products or its investors are in different locations. The Guidance further reinforces the risk-based regulatory principle. Going forward, regulatory enforcement may focus more intensively on high-risk institutions, high-risk products and key risk areas.
The Guidance will also strengthen supervision of private fund managers operating outside their registered jurisdictions, gradually promoting the alignment between their registered addresses and their actual operating premises. The Asset Management Association of China (AMAC) currently allows an inconsistency between the registered address and the actual operating premises of a private fund manager applying for registration. However, in many cities, Human Resources and Social Security (HRSS) authorities have taken a strict approach and do not recognize the social insurance contributions made through third-party agencies as compliant. Therefore, private fund managers operating outside their registered jurisdictions and entrusting third-party agencies to pay social insurance may face potential compliance risks.
The regulatory authorities will also establish a centralized risk monitoring platform for private funds to collect the information reported by private fund managers, custodians and service providers, as well as the business registration data and judicial proceeding information. This platform will leverage technological means to enhance its ability to conduct see-through analysis, thereby facilitating the detection of potential risks.
III. Crackdown on Illegal and Non-compliant Activities
The Guidance states that compliant institutions shall be strictly supervised, and that illegal institutions shall be eliminated, with illegal conducts being cracked down upon.
(1) In terms of the regulatory focus, the regulatory authorities will first urge private fund managers engaged in non-compliant practices, such as those with unlawful nominee holding or channeling-type business to rectify the situation proactively.
(2) The regulatory authorities will also strengthen the monitoring and supervision of trading behaviors in private securities investment funds to prevent abnormal trading.
(3) Private fund managers involved in cross-border capital flow businesses may also expect stricter scrutiny on cross-border capital flows.
(4) Private fund managers involved in illegal fundraising, misappropriation, self-financing, interest tunnelling, illegal cross-border capital flows or criminal fundraising schemes will be cracked down, with heavier penalties to be imposed.
(5) The regulatory authorities will cancel the registration of any private fund managers that commit serious violations.
In terms of regulatory measures, the Guidance first proposes to establish a blacklist of private fund managers, their sponsors and/or practitioners involved in serious violations. The Guidance also introduces a whistleblowing mechanism for the private fund industry for the first time, with dedicated whistleblowing channels and supporting measures to strengthen private fund managers’ internal compliance. In terms of multi‑departmental enforcement collaboration, the public security authorities and the CSRC (together with its dispatched offices) are required to establish joint supervision to strengthen the crackdown on serious violations and criminal offenses in the private fund sector, achieving full accountability through an “administrative first, criminal second” combined approach. The Guidance also requires the public security authorities to utilize their grid-based management framework to jointly identify and investigate institutions and activities that evade financial regulation or illegally engage in private fund business, thereby facilitating early detection, intervention and enforcement.
IV. Requirements for Sound Development
The Guidance highlights the plan to establish a private fund regulatory framework mainly focusing on administrative supervision, supplemented by self-disciplinary management. It also emphasizes the revisions to the Securities Investment Fund Law, the issuance of judicial documents regarding the handling of private fund-related criminal cases, and the formulation of regulatory rules concerning the supervision of private fund managers, information disclosure, fund raising and mandatory custody. We note that in the CSRC’s 2026 Legislative Work Plan, the Securities Investment Fund Law has been included in the list of laws and regulations pending revision, while the Measures for the Supervision and Administration of Private Fund Raising and the Measures for the Supervision and Administration of Private Fund Custody Business have been listed for formulation. These are expected to gradually build a comprehensive so called “1+N+X” institutional framework for the private fund industry.
The Guidance also requires private fund managers to improve their internal controls and risk management, based on their business type and their stage of development. It encourages investors to exercise oversight through private fund contracts, so as to promote the sound operation of private fund managers. Senior management and the key personnel of private fund managers may be subject to stricter qualification administration, examination and training requirements. Institutions and practitioners in the private fund industry are required to faithfully perform their duties of honesty, good faith, prudence and diligence, failure of which will face more stringent self-disciplinary actions.
The Guidance particularly emphasizes the importance of sound operations and risk prevention for private securities investment funds, while highlighting high‑quality industry development and their functions in serving real economy. In the future, we may see a shift in regulatory focus from manager admission and general compliance management to the supervision of particular areas such as investment activity, trading behavior monitoring and investor protection. The Guidance also prompts private securities investment fund managers to meet the diversified needs for mid‑ to long‑term capital allocation, urging them to enrich their investment strategies and product types, while fostering institutional investors such as fund‑of‑funds (FOFs).
V. Conclusion
According to the CSRC’s Q&A with the press, the CSRC will formulate a three-year action plan to implement the Guidance and coordinate with the macroeconomic policy departments, the state-owned assets supervision or industry administrative authorities, other financial regulatory authorities, the public security authorities and the local governments to ensure the effective implementation of all the initiatives. We recommend that private fund managers monitor the issuance of the implementation rules and promptly assess their existing business model, internal controls and compliance management mechanisms. Managers should also proactively strengthen their internal policy framework and risk control mechanisms to adapt to the increasingly stringent regulatory landscape.
