Let every ray of "sunshine" become the confidence of private equity investors

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■ Xing Meng

On March 13, the China Securities Investment Fund Industry Association released the “Implementation Rules for Private Fund Information Disclosure (Draft for Comments).” As a supporting regulation to the CSRC’s “Supervision Measures for Private Fund Information Disclosure,” it refines the overall requirements into practical standards, further improving the industry’s information disclosure system.

Overall, from regulatory measures to detailed rules, this set of new regulations ensures transparency throughout the private fund operation process, effectively clarifies responsibilities, standardizes fund operations, protects investors’ legal rights, and leads the industry toward a more regulated, transparent, healthy, and orderly development stage.

First, “Sunshine” shines into the core—clarifying responsibilities so that information disclosure becomes an unavoidable duty.

For a long time, the private fund industry has suffered from inconsistent disclosure standards, selective content, and lagging major disclosures. Some managers withhold key information or are vague on core issues, making it difficult for investors to understand the true situation of the funds, resulting in information asymmetry.

This new regulation addresses these issues by clearly defining the responsibilities of all market participants. First, it emphasizes the primary responsibility of private fund managers to disclose information, requiring them to prioritize investors’ interests and disclose information truthfully, accurately, completely, and promptly. Second, it establishes a “responsibility grid,” clarifying the obligations of custodians, sales agencies, and other relevant parties, requiring them to perform their duties and ensure the authenticity, accuracy, and completeness of the information within their scope. This creates a comprehensive responsibility network covering the entire chain of private fund fundraising, investment, management, and withdrawal, ensuring accountability without blind spots and disclosure without exceptions.

Second, “Sunshine” penetrates into the asset side—strengthening transparent disclosures to give investors a clearer view.

In industry development, some private funds face issues like layered nesting and unclear investment targets, leading to overly complex information chains and opaque underlying assets, making it hard for investors to track where the funds ultimately go, thus increasing risk.

To address this, the new regulation requires enhanced transparency: for private securities funds with nested structures, it mandates disclosure of consolidated investment asset categories, amounts, and ratios after transparency, ensuring investors can see each layer of fund flow and asset quality. For complex, high-risk private funds, it requires clear and prominent disclosure of operational and transactional risks involved. This transparency-driven regulation pushes for clear operation and risk disclosure, making “seeing clearly” a key line of defense for protecting investor rights.

Finally, “Sunshine” reaches the operational side—differentiated institutional arrangements to tailor disclosures to market needs.

In reality, private securities funds and private equity funds differ naturally in operation models, investment targets, and risk profiles: the former invests in standardized secondary market assets with high liquidity and frequent valuation; the latter invests in unlisted companies with longer cycles and complex exit paths. Their disclosure needs are inherently different, and a one-size-fits-all approach is inadequate.

In response, the new regulation adopts a categorized approach: for private securities funds, it emphasizes high-frequency disclosures such as net asset value and leverage levels; for private equity funds, it focuses on underlying asset disclosures, including industry, book value, and exit methods. This tailored system design ensures that disclosure requirements match product characteristics, avoiding compliance burdens from information overload while providing investors with truly valuable decision-making information.

We sincerely look forward to the implementation of these new private fund disclosure regulations, which will clarify responsibilities, enhance transparency of asset quality, and regulate operational rhythms. Ultimately, every ray of “sunshine” will become investors’ confidence—building a firewall for rights protection through institutional strength and paving the way for high-quality industry development on a foundation of trust.

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Editor: Gao Jia