Chapter I General

Article 1 In order to implement the decisions and arrangements of the CPC Central Committee and the State Council on deepening a new round of comprehensive pilot of further opening up the service sector in Beijing, the Interim Measures are formulated in accordance with relevant laws, regulations and documents to step up efforts for a new round of high-level opening-up of the financial sector in Beijing, expand the scale of foreign capital utilization, improve the quality of foreign investment and boost the development of the equity investment market and technological and financial innovation in Beijing.

Article 2 Qualified foreign limited partner hereby mentioned refers to a foreign natural person or an institutional investor who subscribes for the pilot funds stipulated in these Measures.

Pilot fund management enterprise refers to an enterprise that has been recognized by the pilot joint review members, and entrusted to manage investments under pilot funds initiated and established in Beijing in accordance with the provisions.

Pilot fund refers to one or more private investment funds initiated by pilot fund management enterprises in Beijing in accordance with the law, invested and established with the participation of qualified overseas limited partners. Such funds are raised from investors in a non-public way and invested by investors. Pilot fund management enterprises and pilot funds are collectively referred to as "pilot enterprises".

Article 3 A pilot joint review mechanism is established for this pilot program under the guidance of relevant state authorities. The pilot joint review members include the Beijing Local Financial Supervision Administration, Beijing Municipal Administration for Market Regulation, Operations Office of the People’s Bank of China and Beijing Foreign Exchange Administrative Department of the State Administration of Foreign Exchange. The pilot joint review work shall be carried out under the guidance of relevant authorities, and the Pilot Joint Review Office is set up and run by Beijing Local Financial Supervision Administration.

The Pilot Joint Review Office run by Beijing Local Financial Supervision Administration shall be responsible for the daily affairs of the pilot joint review work, including organizing the promotion, daily management and risk prevention of the pilot work, accepting pilot application materials and other relevant documents, and organizing the relevant pilot joint review member units to review the application materials. Beijing Municipal Administration for Market Regulation shall be responsible for coordinating and guiding the registration of pilot enterprises. The Operations Office of the People’s Bank of China and Beijing Foreign Exchange Administrative Department of the State Administration of Foreign Exchange shall be responsible for the supervision and control of foreign exchange registration, account opening, capital exchange, cross-border RMB transactions and other matters involved in the Measures. All pilot joint review members shall be responsible for promoting the relevant pilot work according to their respective responsibilities.

Chapter II Pilot Application

Article 4 Pilot fund management enterprises are divided into domestic-funded pilot fund management enterprises and foreign-invested pilot fund management enterprises.

A pilot enterprise may choose between corporation and partnership as the organizational form, and a pilot fund may also adopt the contract-based system or other organizational forms.

Article 5 A private investment fund management enterprise or its controlling shareholder, actual controller or executive partner shall, as the applicant of the pilot enterprise, submit application materials to the Pilot Joint Review Office.

Article 6 After receiving all application materials from an applicant, the Pilot Joint Review Office shall decide whether to accept the application; after acceptance, it shall solicit the opinions of the pilot joint review members and organize and hold a pilot joint review work meeting to jointly review the pilot application materials. The pilot joint review members shall then assign relevant persons in charge to attend the meeting and issue written opinions. If an applicant reviewed meets the requirements of the pilot program, the Pilot Joint Review Office shall issue a written opinion approving the launch of the pilot program and granting the pilot quota to the applicant, and then report relevant situation to the People’s Government of Beijing Municipality.

Article 7 Pilot fund management enterprises shall meet the following conditions:

1. The controlling shareholder, actual controller or executive partner of a private investment fund management enterprise shall meet the following conditions: a financial enterprise (approved to engage in the relevant financial business by the regulatory authorities of the country or region where they are located and with licenses issued by the local regulatory authorities) or a fund management enterprise with a fund management scale of not less than CNY 100 million or equivalent value in foreign currencies.

2. Private investment fund management enterprises or their shareholders shall operate legally and systematically with a sound governance structure and thorough internal control system, and shall not have been punished by judicial organs or relevant regulatory authorities in the past three years.

3. A private investment fund management enterprise shall have at least two senior managers with more than three years of experience in equity investment or equity investment management and good personal credit records.

4. If they are required to, private investment fund management enterprises shall register with the Asset Management Association of China in accordance with the current provisions.

5. Other conditions required by the pilot joint review members.

Article 8 Pilot funds shall meet the following conditions:

1. In principle, the scale of a single fund shall not be less than CNY 100 million (or equivalent value in foreign currencies), and private investment fund management enterprises can subscribe for a certain proportion of fund shares.

2. Other conditions required by the pilot joint review members.

Article 9 A qualified limited partner of a pilot fund shall meet the following conditions:

1. An institution or individual shall have corresponding risk identification and bearing capabilities and relevant investment experience.

2. An institutional investor shall have a sound governance structure and thorough internal control system and shall not have been punished by the judicial organs or relevant regulatory authorities of the country or region where it is located in the past three years; a foreign institutional investor shall have net assets of not less than USD 5 million or its equivalent value in other currencies, and a single investment amount of not less than USD 1 million or its equivalent value in other currencies; and a domestic institutional investor shall have net assets of not less than CNY 10 million and a single investment amount of not less than CNY 1 million.

3. A domestic or foreign individual investor shall have net financial assets of not less than CNY 3 million, financial assets of not less than CNY 5 million or an average annual income of not less than CNY 500,000 in the last three years, and a single investment amount of not less than RMB 1 million.

4. Other conditions required by the pilot joint review members.

Chapter III Pilot Operation

Article 10 Pilot enterprises shall entrust corporate banking institutions approved the banking and insurance regulatory authority of the State Council as fund custodian banks which shall have the capability and qualification for fund custody, or operate branches at a secondary level and above in Beijing. Such custodian banks shall supervise investment activities, escrow accounts and the use of account funds.

Article 11 A newly established pilot enterprise can go through the registration formalities with the market regulatory authorities on the basis of written opinions that approve the launch of the pilot program and grant the pilot quota to be issued by the Pilot Joint Review Office. If they are required to, pilot enterprises shall go through the formalities of registration and filing with the Asset Management Association of China in accordance with the current provisions.

Article 12 When a pilot fund management enterprise initiates and establishes a pilot fund, the sum of overseas remittance entities raised by a single fund shall not exceed the total scale of offshore funds raised by the pilot fund management enterprise as approved by the Pilot Joint Review Office. Unless otherwise stipulated, the pilot fund management enterprise can flexibly adjust the scale of offshore funds raised by a single fund among the funds it has established.

Article 13 The exchange settlement of pilot funds can be handled by custodian banks in accordance with the relevant foreign exchange regulations and the following principles:

1. Pilot funds shall entrust the custodian banks to take custody of the funds. The custodian banks shall carry out separate accounting for the contributions of pilot fund investment funds and the use of other funds and regularly submit reports on the flow of funds to the Pilot Joint Review Office and copy them to the relevant authorities.

2. The investment scope of pilot funds shall conform to relevant provisions of the fund contracts, articles of associations or partnership agreements, and the investment of funds shall conform to national industrial policies and current special administrative measures for foreign investment access.

Article 14 Offshore funds raised as pilot funds can be invested for the following purposes:

1. Equity of unlisted companies.

2. Non-publicly issued and traded ordinary shares of listed companies (including directional issuance of new shares, block trading, agreement transfer, etc.), preferred shares convertible into ordinary shares, debt-for-equity swaps and convertible bonds, and participation in allotment of shares as the original shareholder of listed companies.

3. Mezzanine investment, privately raised company bonds and non-performing assets.

4. Investment in domestic private investment funds.

5. Other businesses permitted by the laws and regulations.

The domestic projects invested by pilot funds shall comply with requirements of the current special administrative measures for foreign investment access. If the China Securities Regulatory Commission or Asset Management Association of China has other provisions on the scope of investment, such provisions shall prevail. Without approval, the pilot funds shall not use the raised funds to invest outside of China.

Article 15 The raising of offshore funds by pilot funds shall comply with relevant provisions of local regulatory authorities, and the raising of domestic funds by pilot funds shall comply with relevant laws and regulations of China. The profits of the pilot funds can be distributed or liquidated according to the provisions of the fund contracts, articles of associations or partnership agreements, and the remittance of investment earnings abroad shall conform to relevant national provisions on foreign exchange control.

Chapter IV Supervision and Administration

Article 16 The pilot joint review members shall be responsible for the joint supervision and dynamic supervision of the pilot work according to their respective responsibilities.

Article 17 Pilot fund management enterprises shall regularly submit business reports (fund remittance and exchange, and investment income) to the Pilot Joint Review Office, reports on fund custody by custodian banks, annual financial reports audited by certified public accountants and quarterly reports on major events during investment operation, and copy them to the relevant units.

Article 18 Custodian banks shall, in accordance with relevant provisions, perform the obligation of declaring international revenue and expenditure and keep the revenue and expenditure information of the accounts of pilot enterprises intact for a period of 20 years for the purpose of verification by relevant authorities.

Custodian banks shall supervise the use of funds in the escrow accounts of pilot enterprises, verify the authenticity of the use of funds and the written opinions of relevant competent authorities required for investment, and immediately report any suspicious situation to the Pilot Joint Review Office and relevant members.

Custodian banks shall compile quarterly reports on the cross-border capital revenue and expenditure and foreign exchange settlement and sale of pilot enterprises, submit them to the Pilot Joint Review Office and copy them to relevant departments.

Article 19 In the case that a pilot fund management enterprise or custodian bank violates the provisions of the Measures, but such violations are minor and do not cause serious consequences, the Pilot Joint Review Office and relevant authorities shall conduct an interview with relevant entities and require them to make corrections in time; where the circumstances are serious, the Pilot Joint Review Office and relevant authorities shall suspend the pilot business and investigate to determine relevant responsibilities in accordance with the law.

Chapter V Supplementary Provisions

Article 20 Investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan participating in pilot funds as limited partners shall be deemed as foreign investors, whose investment in establishing private investment funds and participation in the pilot program by enterprises under their management shall be governed with reference to the Measures.

Article 21 The Measures shall come into force as of the date of promulgation. Relevant problems arising in the implementation of the Measures shall be solved by the Pilot Joint Review Office through consultation with relevant authorities.