I OVERVIEW OF RECENT ACTIVITY

2019 was a year of transition and development for the asset management industry in China, with regulators placing new emphasis on functional regulation2 and asset management institutions engaging in active management, following promulgation of the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (the New AMR). The New AMR has come to specify the scope of asset management business in China since its effectiveness in 2018, defining asset management business as 'financial services whereby a banking, trust, securities, fund, futures, or insurance asset management institution, financial asset investment company, or any other financial institution, as commissioned by an investor, invests and manages the commissioned property of the investor.'3

Before the New AMR, regulators generally adopted a departmental approach toward the asset management industry, with each regulator acting within its scope of authority, promulgating specific rules, and regulating specific asset management products and institutions. The New AMR aims to unify regulatory standards, provide uniform rules for multiple types of asset management business and implement functional regulation and fair market access. In implementing the New AMR, the relevant regulators have issued implementing rules to further specify the rules for asset management business subject to their authority. The New AMR has thus ushered in a regulatory model for asset management under unified guiding principles that are supplemented both by recently issued implementing rules and previously existing non-conflicting rules.

II GENERAL INTRODUCTION TO THE REGULATORY FRAMEWORK

The primary regulators for asset management business in China include the Financial Stability and Development Committee, the People's Bank of China (PBC), the China Banking and Insurance Regulatory Commission (CBIRC) and the China Securities Regulatory Commission (CSRC). Regulators for cross-border asset management businesses also include the Ministry of Commerce of the People's Republic of China (MOFCOM) and the State Administration of Foreign Exchange (SAFE). It is notable that some self-regulatory organisations also issue self-regulatory rules that are applicable to the relevant industry, including the SAC (Securities Association of China), the Asset Management Association of China (AMAC), the CTA (China Trustee Association), the CBA (China Banking Association), the China Futures Association (CFA) and the Insurance Asset Management Association of China (IAMAC), among others. In fact, routine asset management business operations more often rely upon self-regulatory rules, other than the departmental rules and normative documents promulgated by regulators.

III COMMON ASSET MANAGEMENT STRUCTURES

i Types of issuers of asset management products

Asset management institutions in China are required to apply for applicable licences with their respective regulators or industry self-regulatory organisations and may thereafter issue and operate asset management products falling within their respective scopes of authorisation. Asset management products can be categorised by both their competent regulators and by different types of issuers:

Contractual arrangementOpen-ended or closed-ended

Issuer Asset management product Legal structure Open-ended or closed-ended
Securities companies and their subsidiaries
  • Collective asset management plan
  • Directional asset management plan
  • Special asset management plan
Contractual arrangement Open-ended or closed-ended
Fund management companies and their subsidiaries
  • Public fund
  • Specific asset management plan
  • Securities investment fund (SIF)
  • Contractual arrangement
Open-ended or closed-ended
Futures companies and their subsidiaries
  • Collective asset management plan
  • Single asset management plan
Contractual arrangement Open-ended or closed-ended
Trust companies
  • Single fund trust
  • Collective fund trust
Trust Open-ended or closed-ended
Insurance asset management companies
  • Equity investment plan
  • Debt investment plan
  • Hybrid insurance asset management product
Contractual arrangement Equity investment plan should be closed-ended
  • Wealth management departments of commercial banks
  • Wealth management subsidiaries of commercial banks
  • Public wealth management product
  • Private wealth management product
Contractual arrangement Open-ended or closed-ended
Private fund managers
  • Private securities investment fund
  • Private equity investment fund
  • Asset allocation fund, etc.
  • Corporation, partnership
  • Contractual arrangement
Closed-ended

ii Types of investors – public and private asset management products

Asset management products can be classified as either publicly offered or privately offered, depending on the offering targets. Publicly offered products are offered to unspecified members of the general public, with the criteria for determining a 'public offering' set forth in the Securities Law of the People's Republic of China (2019 Revision) (Order of the President of the People's Republic of China, No. 37). In contrast, privately offered products are offered to qualified investors in a non-public manner.

iii Types of asset management products

Asset management products can also be classified by the nature of the underlying investments, which include fixed-income products, equity products, commodity or financial derivative products, and hybrid products. Asset management institutions are required to disclose to investors the types of asset management products based on these classification standards when the products are issued and are required to make investments in accordance with the designated targets and strategies.

IV MAIN SOURCES OF INVESTMENT

Looking back at 2019, the bank wealth management industry underwent significant changes, with trust assets under management steadily dropping and the overall steady growth of public funds, private funds, and other industries.

For the bank wealth management industry, as of the end of 2019, there were 47,300 non-guaranteed bank wealth management products, with a remaining balance of 23.40 trillion yuan. Since 2017, the balance of bank wealth management products has generally remained stable without significant fluctuations.4

For the trust industry, by the end of the fourth quarter of 2019, the amount of trust assets under management by 68 trust companies nationwide was 21.6 trillion yuan. Compared with 2018, assets under management in the trust industry decreased significantly in 2019, and the trust industry entered a steady downturn with relatively small fluctuations.5

For the asset management industry under AMAC supervision, as of the end of 2019, public fund management institutions managed 1,544 public funds representing 13.7 trillion shares and the amount under management was approximately 14.8 trillion yuan; private asset management plans sponsored or managed by licensed institutions reached approximately 19.8 trillion yuan; 24,471 private fund managers registered with AMAC, 81,739 private funds have filed with AMAC, the size of which reached approximately 13.7 trillion yuan. In addition, the size of pension funds managed by fund management companies and the number of asset-backed special plans filed with AMAC continue to increase.6

V KEY TRENDS

i Further expansion of opening-up policies

In 2019, the asset management industry in China opened up further to foreign institutions. The Chinese government issued a series of measures which aim to open up the financial sector, such as encouraging foreign financial institutions to participate in the sponsoring of and/or investment in wealth management subsidiaries of commercial banks, allowing foreign financial institutions to participate in the sponsoring of, or investment in, or both, pension management companies, allowing foreign investors to hold more than 25 per cent equity in insurance asset-management companies, and advancing from 2021 to 2020 the lifting of restrictions on foreign shareholding ratios in securities companies, fund management companies and futures companies. The State Council implemented further measures for opening up the financial sector to foreign-funded banks and foreign-funded insurance companies, with amendments in October 2019 to the Regulations of the People's Republic of China on Administration of Foreign-funded Banks (2019 Revision) (Order of the State Council of the People's Republic of China, No. 720) and the Regulations of the People's Republic of China on Administration of Foreign-funded Insurance Companies (2019 Revision) (Order of the State Council of the People's Republic of China, No. 720). In addition, SAFE announced that, with the approval of State Council, SAFE has decided to lift investment quota restrictions on QFIIs and RQFIIs, as well as geographical limitations on pilot countries and regions.

ii Further strengthen the protection of investors

An important development in the asset management industry in 2019 was the emphasis on investor protection, which was reflected not only in regulatory rules but also in judicial rulings. Below are some highlights.

First, more emphasis was placed on imposing a 'suitability matching' obligation on issuers and sellers of asset management products. On 25 December 2019, the PBC, CBIRC, CSRC, and SAFE jointly issued the Circular on Further Regulating Financial Marketing and Publicity Activities (Yin Fa [2019] No. 316), which governs the marketing of financial products by financial service operators and strengthens the supervision of financial marketing activities. On 14 November 2019, the Supreme People's Court issued the Minutes of the National Courts' Civil and Commercial Trial Work Conference, which contains a chapter on the 'Trial of Cases Involving Disputes over Protection of Financial Consumers' Rights and Interests'. This chapter considers suitability matching to be the main indicia for due performance of the 'seller's duties' by financial product issuers, sellers and financial service providers. We have also seen judicial cases that ruled against banks, acting as sellers of financial products, where the banks were required to make whole the loss of investors due to their failure to prove their due performance of the suitability matching obligations as required by the law. These cases have generated extensive discussion in the asset management industry.

Second, more emphasis was placed on the protection of financial information of consumers. On 27 December 2019, PBC released the Implementing Measures of the People's Bank of China for Protection of Financial Consumer Rights and Interests (Draft for Comment). From the perspective of the overall protection of financial information of consumers, Chapter 3 of these measures aims to optimise the entire chain of protection in respect of information collection, disclosure and notification, use, management, storage and confidentiality, deletion and correction, cross-border transfer and management of outsourcing services.

iii Fintech coming into play

Issuance of the New AMR has forced the asset managers to break the practice in certain asset management business of providing investors with express or implicit guarantees against investment losses, and to manage the products based on their net value. Asset management institutions have pivoted back to the substance of asset management business by acting as commissioned agents in the provision of asset management services and are gradually focusing more on the improvement of investment and research capabilities, in-depth user-specific services, and risk management and control capabilities. The use of financial technologies is also of great significance for all asset management institutions to improve these capabilities and services. By January 2019, nearly 80 per cent of public fund managers and 50 per cent of private funds have each annually invested more than 1 million yuan in the fintech industry.7 Scenarios for the application of fintech in the asset management industry include improving the quality and efficiency of investment research and services through human-computer integrated data search and analysis engines, intelligent report generation technology, analysing product categories and investment amounts invested by clients through big data and artificial intelligence technology, and integrating existing data for compliance management and anti-money laundering review, etc.8

iv Emergence of new asset management institutions

From the perspective of corporate governance and for purposes of risk isolation, the New AMR requires in principle that commercial banks conduct wealth management business through subsidiaries with independent legal person status. Banks that currently do not have the capacity to set up separate entities may set up specialised departments to conduct centralised operation and management of wealth management business. In 2019, 11 wealth management subsidiaries of commercial banks were established, and approval for establishment was granted to several wealth management subsidiaries of commercial banks and one foreign-controlled wealth management company. In this manner, wealth management subsidiaries have emerged as independent asset management institutions.

In addition, it is worthwhile to note that regulators intend to include within the scope of regulation the holding companies of financial institutions (known as 'financial holding companies'),9 based on PBC' issuance of the Trial Measures for the Supervision and Administration of Financial Holding Companies (Draft for Comment) in July 2019.

Further, financial asset management companies (AMCs) which mainly engage in non-performing assets business have drawn increased attention. AMCs are subject to a higher threshold of qualifications, and at present, there are five national AMCs and fewer than 63 local AMCs.

v Development trends of private funds

As of the end of 2019, there were about 24,000 private fund managers registered with AMAC. The number of private funds which filed with AMAC and validly existing reached 82,000, and the amount of private funds was approximately 13.7 trillion yuan.10 As compared to the previous year, 2019 saw an increase in the number and size of private fund filings with overall filings entering a slower growth patch. With the tightening supervision on private equity, the limitation on the source of funds brought about by the New AMR and the impact of the downturn in the economic cycle, 2019 has seen substantial downward pressure on fundraising. Only the fittest private fund managers were able to thrive in the market where it tends to be less difficult for top private fund managers to raise large sums of money. Government-funded platforms and government-led funds have risen to become one category of primary investors for private equity funds, accounting for 28.7 per cent of private equity fund investors.11 In addition to the issuance of traditional private equity funds, PIPE funds and non-performing asset funds were relatively more active.

VI SECTORAL REGULATION

i Insurance

Insurance companies and insurance asset management companies play different roles in various types of asset management products as follows:

Participant Role Asset management product Regulations
Insurance company Investor Private equity fund Circular of the China Insurance Regulatory Commission on Promulgation of the Interim Measures on Equity Investments Using Insurance Funds (Bao Jian Fa [2010] No. 79)
Venture capital fund Circular of the China Insurance Regulatory Commission on Matters relating to the Investment in Venture Capital Funds with Insurance Funds (Bao Jian Fa [2014] No. 101)
  • Insurance company
  • Insurance asset management institution
  • Subsidiaries of insurance asset management institution
  • Manager
  • Promoter
  • Investor
Insurance private equity funds Circular of the China Insurance Regulatory Commission on Matters relating to the Formation of Insurance Private Equity Funds (Bao Jian Fa [2015] No. 89)
Insurance asset management company Manager Debt investment plan Interim Measures for Administration of Insurance Asset Management Products (China Banking and Insurance Regulatory Commission Order [2020] No. 5)
Equity investment plan
Portfolio product

Notably, CBIRC issued departmental rules unifying as 'insurance asset management products' the regulation of debt investment plans, equity investment plans, portfolio products and other products in the Interim Measures for Administration of Insurance Asset Management Products, which were promulgated on 18 March 2020 and effective on 1 May 2020. These measures put an end to an era where various insurance asset management products lacked unified arrangements.

ii Pensions

Primary Laws and Regulations

Significant Primary Laws and Regulations are the following:

  1. the Social Insurance Law of the People's Republic of China (2018 Revision);
  2. the Regulations on the National Social Security Fund (State Council Decree No. 667);
  3. the Interim Measures for Administration of National Social Security Fund Investment (Ministry of Finance, Ministry of Labor and Social Security; Decree [2001] No. 12);
  4. the Measures for Administration of Investment of the Basic Old-age Insurance Fund (Guo Fa [2015] No. 48);
  5. the Measures for Administration of Annuities of Enterprises (Ministry of Human Resources and Social Security, Ministry of Finance; Decree No. 36);
  6. the Measures for Administration of Enterprise Annuity Fund (2015 Revision); and
  7. the Circular on Expanding the Investment Scope of Enterprise Annuity Funds (Ren She Bu Fa [2013] No. 23).

Product classification

Pension funds in China include national social security funds, basic old-age insurance funds, enterprise annuities, and other products.

National Social Security Fund (NSSF)

The NSSF is composed of funds allocated by the central government, transfer of state-owned capital, fund investment proceeds and funds raised through other means approved by the State Council.

Note the following:

  1. regulators: the Ministry of Finance and the Ministry of Human Resources and Social Security;
  2. operation and management: the National Council for Social Security Fund (NCSSF) is responsible for the operation and management of the NSSF;12 and
  3. investment scope: the scope of domestic investment includes bank deposits, bonds, trust loans, asset securitisation products, stocks, securities investment funds, equity investments, equity investment funds, etc.; the scope of overseas investment includes bank deposits, bank notes, large transferable deposit certificates and other money market products, bonds, stocks, securities investment funds, derivative financial instruments, etc.

The NSSF had not made new investments in private equity funds in the past few years. We have observed in practice that NSSF resumed investing in private equity funds in 2019.

Basic old-age insurance funds13

Basic old-age insurance funds are composed of the contributions of individuals and their employers.

Note the following:

  1. regulators: the Ministry of Finance and the Ministry of Human Resources and Social Security, PBC, CBIRC and CSRC;
  2. operation and management: the provincial people's governments entrust the NCSSF as the entrusted institution, and qualified managers are engaged to provide specific investment management service; and
  3. investment scope: bank deposits, central bank notes, interbank certificates of deposit; bonds, asset-backed securities, and bond repurchase; pension products, securities investment funds, stocks, equities, stock index futures, and treasury bond futures.

Supplemental old-age insurance funding – enterprise annuity funds

The enterprise annuity is a non-compulsory type of old-age insurance that supplements basic old-age insurance and is jointly paid by an enterprise and its employees. Enterprise annuity funds refer to funds raised by an enterprise in accordance with its enterprise annuity plan and the investment proceeds therefrom. Management of enterprise annuity funds is to be entrusted to a qualified pension management company or the enterprise's annuity council.

Note the following:

  1. regulators: the Ministry of Finance, Ministry of Human Resources and Social Security, CBIRC and CSRC;
  2. operation and management: qualified pension management company or the enterprise's annuity council; and
  3. investment scope: limited to domestic investment. The scope of investment includes bank deposits, bonds, central bank notes, universal insurance products, investment-linked insurance products, securities investment funds, stocks, short-term financing instruments and medium-term instruments, as well as wealth management products of commercial banks, trust products, infrastructure debt investment plans, specific asset management plans and stock index futures.14

iii Real property

The main asset management products in the real estate sector are as follows.

Real estate asset-backed securitisation

The asset-backed securitisation (ABS) business refers to business activities involving the issuance of asset-backed securities by securities companies, fund management subsidiaries and other relevant entities through setting up of special-purpose vehicles or through other structured financing methods for the purpose of credit enhancement, and being repaid and backed by the cash flow generated from underlying assets. Real estate ABS products mainly include supply chain ABS, securities backed by receivables from property sales, property management fee ABS, commercial real estate mortgage-backed securities and quasi-REITs in China.

Real estate private funds

Prior to the introduction of certain AMAC restrictions on private funds' debt investments, real estate funds mainly focused on debt-related investments. Following these restrictions, real estate private funds have increasingly focused on equity-related investments. According to AMAC statistics, 283 new real estate funds formed and filed with AMAC in 2019, with a total amount committed of proximately 200 billion yuan; both the number and size of new funds have decreased significantly.15

iv Hedge funds

Public securities funds

The regulation of public funds is more consistent with the principles of the New AMR compared with other asset management products; public funds are thus less affected by the New AMR. According to AMAC statistics, assets under management by public fund management institutions increased by 1.7 trillion yuan in 2019. In China, public funds are mainly structured in the form of contractual arrangements and managed by qualified public fund management companies.

In October 2019, the CSRC issued the Circular on Effectively Implementing the Pilot Program of Investment Advisory Business for Publicly Offered Securities Investment Funds. By the end of December 2019, eight institutions have obtained investment advisory qualifications for public securities investment funds.16

On 20 July 2019, the General Office of the Financial Stability and Development Commission of the State Council issued the Relevant Measures on Further Opening-up of the Financial Industry, advancing from 2021 to 2020 the lifting of restrictions on foreign shareholding ratios in securities companies, fund management companies, and futures companies. On 11 October 2019, the CSRC clarified through a press release that from 1 April 2020, the restrictions on the shareholding ratio of foreign investors in public fund management companies will be lifted across the nation. Based on the foregoing, it can be expected that foreign-invested public fund management institutions will play a role in China's public fund market in the future.

Private securities funds

Private securities funds are privately offered to qualified investors, managed by institutions licensed as private securities fund managers, and mainly invest in stocks, bonds, futures, and other securities.

Notably, private securities fund management business has opened up to foreign investors much earlier than public fund management. Eligible foreign-invested private securities fund managers may carry out fund management business within China in the form of JV or WFOE according to the Answers to Questions No. 10 concerning the Registration and Record-filing of Privately Offered Funds issued by AMAC on 30 June 2016. As of December 2019, a total of 25 wholly foreign-owned private securities fund managers have registered with AMAC.17

v Private equity

The market in China does not recognise clear differences between private equity funds (PE funds) and venture capital funds, thus, unless otherwise specified, references to PE funds in this Review include venture capital funds.

Depending on their organisational form, PE funds may be divided into corporate funds, partnership funds, and contractual funds, and the first two types of funds are registered as legal entities in accordance with the Company Law of the People's Republic of China (2018 Revision) (Order of the President of the People's Republic of China No.15) and the Law of the People's Republic of China on Partnership Enterprises (2006 Revision) (Order of the President of the People's Republic of China [2006] No. 55), respectively.

AMAC is a self-regulatory organisation for the fund industry that supervises the fund industry under the authorisation and guidance of CSRC. AMAC's responsibilities include formulating and implementing industry self-regulatory rules, processing registrations of private fund manager, record-filing of private funds, management of professional qualifications and practitioners, information disclosure and the performance of other functions in accordance with the relevant laws and regulations. With higher-level regulations still in the process of legislation, AMAC has issued the Instructions for Record-filing (2019 version), which provides current self-disciplinary rules intended to implement principles of the New AMR for fundraising, investment, management and withdrawals of private equity funds.

With respect to foreign investment, overseas investors can sponsor or manage yuan-denominated funds in PRC pilot cities as QFLPs (qualified foreign limited partners)or make fund investments directly through foreign-invested enterprises. Pingtan, Fujian Province became a pilot city in 2018, and Zhuhai and Guangzhou were subsequently included as pilot cities in 2019.

vi Other sectors

Qualified domestic limited partner (QDLP)

The QDLP pilot programme originated in Shanghai in 2012, and Chongqing, Tianjin, Qingdao and other regions that promulgated relevant regulations for the launch of the pilot programme. The QDLP programme allows qualified foreign investment managers (QDLP managers) to raise capital from qualified domestic investors to set up overseas investment funds (QDLP funds) in China for outbound investment. At present, QDLP funds can be organised in the form of a limited partnership fund or contractual fund, and their investment scope is also extended to all overseas investments (including making investments through FOF entity). On 24 April 2018, SAFE officially announced that the quota for QDLPs in Shanghai will be increased to US$5 billion.

According to AMAC rules, QDLP managers that carry out private investment fund business in China must be registered with AMAC as private fund managers.18

It is noteworthy that the Beijing launched the QDLP pilot programme in 2020, which simplifies the application process, lifts the quota limitation and expands the investment scope, aiming to increase Beijing's attractiveness to international asset management institutions.

Qualified domestic investment enterprise (QDIE)

Qingdao and Shenzhen promulgated rules laying the groundwork for the QDIE programme in August 2014 and December 2014, respectively. Compared with QDLP, QDIE has been more relaxed and flexible in terms of fund organisation form and investment scope since its implementation. QDIE funds can be established in various forms, such as company, partnership, contract and special account, and their investment scope shall cover all overseas investments. On 24 April 2018, SAFE raised the quota for QDIE in Shenzhen to US$5 billion at the same time it raised the investment quota for QDLPs.

Qualified domestic institutional investors (QDII)

The QDII programme is an arrangement for domestic institutions to invest offshore in stocks and bonds, and engage in other securities investment business in overseas capital markets. According to SAFE data, the approved quota for QDIIs has reached US$103.983 billion as of 31 December 2019.19

Qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII)

Pursuant to applicable regulations, QFIIs and RQFIIs may invest in domestic securities investment funds by foreign institutional investors.

Notably, the CSRC issued a draft for public comments on 31 January 2019 with respect to the revised rules on QFII and RQFII. The draft circulated for public comment consolidates the two systems (QFII and RQFII) into one, forming unified administrative measures and implementing systems. The draft intends to further standardise applicant qualification, streamline application requirements, shorten application periods and expand the scope of domestic investment products for QFIIs and RQFIIs, such as stocks listed on National Equities Exchange and Quotations, bond repurchases, private investment funds, financial futures, commodity futures and options and authorisation to engage in securities margin trading.20 SAFE announced on 10 September 2019 the lifting of investment quota restrictions on QFIIs and RQFIIs.

VII TAX LAW

i Taxation of asset management products and investors

Public funds are currently not subject to enterprise income tax with respect to investment proceeds obtained in securities markets, including net gains on the sale of shares and debentures, equity dividends and bonuses, interest and other income.21 PRC-sourced income derived by QFIIs and RQFIIs from the transfer of equity investments,22 such as shares, and from bond interest in domestic bond market,23 are temporarily exempt from enterprise income tax.

Investors may also be entitled to tax incentives with respect to certain distribution proceeds received from asset management products. For example, no income tax is imposed on interest from treasury bonds or savings deposit interest, and net proceeds obtained by enterprise investors from the sale of publicly traded securities, are not subject to income tax.

Private funds commonly adopt the limited partnership form, which is considered fiscally transparent and thus not a taxpayer for enterprise income tax purposes. Rather, the partners themselves are considered to realise taxable income from the partnership's investment activities. Differences exist between official rules and practices with respect to whether the 20 per cent income tax rate applicable to fund distributions applies to income that investors derive from venture capital fund distributions in the past. A tax circular issued in January 2019 provides a clearer, uniform basis for taxation, allowing venture capital funds to elect for their individual investors a flat 20 per cent rate or graduated rates of 5 per cent to 35 per cent, the Circular on Issues concerning Income Tax Policies for Individual Partners of Venture Capital Enterprises (Cai Shui [2019] No. 8).

ii Taxation of asset management product managers

Asset management product managers, as a value-added tax taxpayers, are subject to a 3 per cent VAT on their taxable activities deriving from asset management product business (including private investment funds),24 including loan services, direct financial service fees, insurance services and transfers of financial products. There remains an ongoing debate whether VAT is assessable on carried interests, which are often received by general partners of limited partnership private equity funds.

VIII OUTLOOK

With the continuous expansion and rapid development of China's asset management industry, we expect that China's regulators will promulgate more detailed implementation rules within their respective scopes of authority under the guiding principles of the New AMR and strive to strengthen the regulation and rectification of the asset management industry. China's asset management industry will continue to become more standardised and market-oriented. With growing participation by overseas asset management institutions in the asset management business, the market will need to adapt to an environment where domestic and overseas asset managers coexist amid cooperation and competition, both as partners and competitors. In the meantime, financial technology and the business of asset management will become ever more integrated, and we foresee more asset management institutions embracing financial technologies in their businesses and increasing their investment stakes in financial technologies.


Footnotes

1 Huaying (Daisy) Qi and Lin Zhou are partners at Han Kun Law Offices.

2 The concept of 'functional regulation' was first raised by Robert Merton from Harvard Business School, which refers to regulation that is designed to have more continuity and consistency based on the basic functions of the financial system and which can be implemented and coordinated cross-product, cross-institution and cross-market.

3 Article 2 of the New AMR.

4 Data comes from the China Banking Wealth Management Market Report (2019), issued by the Banking Wealth Management and Registration Center.

5 For data and information from the Assessment and Analysis of China's Trust Industry Development for 2019 published on the official website of the CTA; see http://www.xtxh.net/xtxh/statistics/45929.htm.

6 For data and information from the Statistical Express Report on Asset Management Business (End of 2019) published on the official AMAC website; see .

7 Data comes from the Investigation and Analysis Report on Financial Technology Application Status for Asset Management Industry issued by AMAC on 25 March 2019.

8 ibid.

9 According to the Trial Measures for the Supervision and Administration of Financial Holding Companies (Draft for Comment), a 'financial holdings company' refers to a limited liability company or joint stock limited company that is lawfully established and actually controls two or more financial institutions of different types, solely engages in equity investment management and does not directly engage in commercial business activities.

10 For data and information from the Statistical Express Report on Asset Management Business (End of 2019) published on the official AMAC website; see .

11 Data comes from China LP Market Development Research Report 2020 issued by Zero2IPO Research on 1 June 2020.

12 Article 6 of Interim Measures for Administration of National Social Security Fund Investment (Ministry of Finance, Ministry of Labor and Social Security; Decree [2001] No. 12) and Article 5 of the Regulations on the National Social Security Fund (State Council Decree No. 667).

13 Measures for Administration of Investment of the Basic Old-age Insurance Fund (Guo Fa [2015] No. 48).

14 Article 1 of Circular on Expanding the Investment Scope of Enterprise Annuity Funds (Ren She Bu Fa [2013] No. 23).

15 The data is sourced from the 2019 Real Estate Fund Research Report jointly released by Shanghai Nuocheng Investment Consulting Co, Ltd and the Financial Branch of the China Real Estate Association.

16 Data and information come from Approved Pilot Funds Investment Increase and Decrease Funds, Yingmi Funds and Ant Funds released by China Securities Journal.

17 Data comes from AMAC Private Fund Manager Comprehensive Inquiry Platform; see http://gs.amac.org.cn/amac-infodisc/res/pof/manager/index.html.

18 According to the Special Statement on the Registration of Qualified Domestic Limited Partners (QDLP) as Managers released by AMAC in June 2018, the manager of a QDLP that intends to carry out private equity investment fund business within the territory of China shall be registered with AMAC as a private fund manager.

19 Article 2(1) of Circular of Ministry of Finance and State Administration of Taxation on Enterprise Income Tax Incentive Policies (Cai Shui [2008] No.1).

20 Circular on Temporary Exemption of Enterprise Income Tax on Income from Transfer of Equity Investment Assets Including Shares within China by QFII and RQFII (Cai Shui [2014] No. 79).

21 Circular on Policies of Enterprise Income Tax and Value-added Tax for Overseas Institutions Investing in the Domestic Bond Market (Cai Shui [2018] No.108).

22 Article 1 of Circular on Issues Relating to VAT on Fund Management Products (Cai Shui [2017] No. 56).

23 Data comes from the Approval Table for Investment Quota of Qualified Domestic Institutional Investors (QDII) issued by SAFE on 31 January 2020.

24 Explanation on the Measures for Administration of Domestic Securities and Futures Investments by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (Draft for Comment) and Supporting Rules Thereof.