NDRC moves to regulate private equity

The regulation of private equity and venture capital in China is evolving quickly. In late December, Shanghai announced a pilot scheme to allow foreign general partners to invest foreign currency in private equity funds that they manage within China (see Business Law Digest on page 20). Now, the National Development and Reform Commission (NDRC) has imposed new filing and disclosure procedures on private equity investors.

The NDRC Progressively Standardizing the Development and Filing Management Work of Equity Investment Enterprises in Pilot Areas Notice was issued on 31 January. It applies in localities which have introduced pilot schemes to encourage private equity investment, namely the cities of Beijing, Shanghai and Tianjin, and the provinces of Jiangsu, Zhejiang and Hubei.

Foreign-funded private equity funds will be encouraged, and in some cases required, to disclose certain information about their investments and their financial position.