Legislative Regulation Study On Investors Of Private Equity Fund In China

At present, overall scale of private equity funds in China is smaller than average.Besides, financing channel is relatively single, and financing structure has theproblems of instability and nonstandard financing. Dating back to its roots,incompleteness of legal system is one of the restriction factors for the difficultfundraising of private equity funds. While the absence of qualified investor system ofprivate equity funds even becomes fundamental reason for private equity funds’difficult fundraising.Collection objects also have many kinds of appellations, such as subscribers,investors and issue admitted people. Its substances indicate specific investors ofprivate equity investor funds. One essential attribute of private equity funds is“private equity”. As a result, supervision department will lower its supervisionrequirements moderately and reduce issuer’s duty of information disclosure. At thistime, only collection objects are qualified investors and with correspondingqualification conditions, can they bear the risk of private equity funds investment.Consequently, the establishment of qualified investors system is very important.Currently, there is no related law to regulate private equity funds in China.Uniform qualified investor standard and system have not been established. First of all,current provisions often judge qualified investors from two angles namely “number ofpeople” and “capital amount”. However, fewer provisions regulate qualified investorsfrom certification standard, such as “maturity” and “information acquisition”.Meanwhile, there are some problems, such as the definition of specific objects isunclear, provisions related to the calculation of people’s amount are too simple andcrude, the application standards and situations of “getting through” calculationprinciple have flaws. Therefore, we should establish uniform judgment standard ofqualified investors, center on “self-protection ability”, measure amount requirementssuch as “wealth” and essential requirements such as “information acquisition ability”and “risk recognition ability” and consider with the combination of the relationshipbetween investor status and issuer. Secondly, we should clarify the definition standardand procedure of specific objects. Thirdly, we should use the principle of singlecalculation first and mergence calculation exceptional should be adopted. Finally, incurrent non-legal person investors’ calculation of “getting through calculation”, people should further detail the conditions of the standard.