New fund rules may lead to structural changes

Private equity and venture capital funds are only allowed to target qualified investors that satisfy the requirements of new rules regulating fundraising in equity investment enterprises (EIE). As a result, fund structures may require changes to ensure compliance, say counsel.

The Circular on Promoting the Standardized Development of Equity Investment Enterprises (关于促进股权投资企业规范发展的通知), which was published by National Development and Reform Commission (NDRC), is the first national regulation governing illegal fundraising by non-publicly traded enterprises.