General Office of the National Development and Reform Commission, Circular on Promoting the Compliant Development of Equity Investment Enterprises

Issued: November 23 2011
Effective: as of date of issuance

Main contents: An equity investment enterprise established in the form of a limited liability company or company limited by shares may manage itself through the establishment of an internal management team or entrust the management of its assets to another equity investment enterprise or equity investment management enterprise. The capital of an equity investment enterprise may only be raised privately from specific qualified investors that have risk identification capabilities and risk bearing capabilities. The parties responsible for raising capital must fully disclose to investors the investment risks and the potential investment losses and may not guarantee investors that they will recover their investment principal or obtain fixed returns. Equity investment enterprises are limited to investing in non-publicly traded equity (Article 1).