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CloseZhou Ming: Private Investment Funds Now Admitted for Account Opening and Trading
(2014-04-01)
Zhou Ming, President of China Securities Depository and Clearing Corporation (CSDC), announced that private investment funds are now allowed to open accounts and trade in the stock exchange market, according to the Circular on the Opening and Settlement of Private Investment Fund Accounts recently issued by CSDC.
Following the publication of the newly amended Securities Investment Fund Law which expanded its regulation coverage to private funds, CSDC formulated the Circular on the Opening and Settlement of Private Investment Fund Accounts to stipulate issues related to the opening and settlement of private investment fund accounts. With full consideration of market feedback and approval from China Securities Regulatory Commission (CSRC), the Circular was officially published and came into effect on March 25th, 2014.
According to the Circular, applications for opening a private fund account can be made with CSDC either by private investment fund managers or by asset custodians. As for settlement, transactions made by private investment funds as common clients of securities companies should be settled with CSDC via securities companies, and transactions made by private investment funds using special transaction units of the stock exchanges should be settled with CSDC via their asset custodians.
Private investment funds had previously participated in the stock exchange market by opening accounts in the name of corporations, partnerships or even trust products, incurring high operational costs. The Circular has facilitated improved market transparency and reduced operational costs by allowing private investment funds to open securities accounts in the name of their own products. This is conducive to the better regulation of the industry and the sound development of the multi-tiered capital market. CSDC will work hard to ensure the smooth implementation of the new policy, and vigorously support the development of private investment funds as well as reform and innovation of the Chinese capital market.
Following the publication of the newly amended Securities Investment Fund Law which expanded its regulation coverage to private funds, CSDC formulated the Circular on the Opening and Settlement of Private Investment Fund Accounts to stipulate issues related to the opening and settlement of private investment fund accounts. With full consideration of market feedback and approval from China Securities Regulatory Commission (CSRC), the Circular was officially published and came into effect on March 25th, 2014.
According to the Circular, applications for opening a private fund account can be made with CSDC either by private investment fund managers or by asset custodians. As for settlement, transactions made by private investment funds as common clients of securities companies should be settled with CSDC via securities companies, and transactions made by private investment funds using special transaction units of the stock exchanges should be settled with CSDC via their asset custodians.
Private investment funds had previously participated in the stock exchange market by opening accounts in the name of corporations, partnerships or even trust products, incurring high operational costs. The Circular has facilitated improved market transparency and reduced operational costs by allowing private investment funds to open securities accounts in the name of their own products. This is conducive to the better regulation of the industry and the sound development of the multi-tiered capital market. CSDC will work hard to ensure the smooth implementation of the new policy, and vigorously support the development of private investment funds as well as reform and innovation of the Chinese capital market.