Private Fund Information Disclosure Measures Implemented Starting September

This article is reprinted from China Securities Journal

Private Fund Information Disclosure Measures Take Effect in September

Standardize Disclosure Practices and Improve Operational Transparency

● By Reporter Zan Xiuli

On February 27, the China Securities Regulatory Commission announced the release of the “Supervision and Management Measures for Private Fund Information Disclosure,” which will come into effect on September 1, 2026. The measures strengthen the disclosure responsibilities of private fund managers and custodians, regulate private fund information disclosure behaviors, and help improve transparency in private fund operations while protecting investors’ legal rights.

Market experts believe that as the first administrative regulation implementing the “Regulations on the Supervision and Administration of Private Investment Funds,” these measures establish a comprehensive private fund information disclosure system. Their release is an important step toward strengthening private fund regulation and optimizing regulatory arrangements.

The China Securities Journal has learned that the CSRC is currently guiding the Asset Management Association of China to develop supporting implementation rules, further detailing specific operational requirements for information disclosure, which will be publicly solicited for comments and released soon.

Clarifying Institutional Responsibilities

The measures systematically specify the disclosure responsibilities of managers, detail disclosure requirements, and reinforce the duties of custodians.

Specifically, they emphasize the primary responsibility of private fund managers for information disclosure. Managers should prioritize the interests of private fund investors, and disclose fund information truthfully, accurately, completely, and promptly according to regulations and agreements. The measures also clarify the disclosure responsibilities of custodians, who must fulfill information disclosure duties related to their custody services, including disclosing the custody agreement, issuing regular custodian reports, reviewing and verifying the financial status of private securities investment funds, and providing opinions accordingly. The disclosure responsibilities of sales institutions are also clarified: they must disclose private fund information truthfully, accurately, completely, and promptly as entrusted, without tampering with information provided by managers. The measures also specify that related parties must cooperate in information disclosure, requiring shareholders, partners, and actual controllers of private fund managers to assist and proactively inform managers of matters related to disclosure.

The measures address the operational characteristics of private funds by detailing comprehensive disclosure requirements throughout the entire process. They specify the objects, principles, content, methods, frequency, and prohibitions related to disclosure, and clarify the specific requirements for periodic reports, interim reports, and liquidation reports. Information should be disclosed privately to investors holding fund shares and not publicly or indirectly disclosed. To address the longstanding issue of opaque nested investments, the measures require disclosure of the underlying assets after penetration, and demand cooperation from invested private funds and legally issued asset management products. They also encourage voluntary disclosure of additional content beyond statutory and contractual requirements, based on the fund’s investment scope and targets.

The measures reinforce the custodian’s duties, requiring timely review of private securities fund financial information. If during their duties custodians discover that the fund manager or the fund itself may have significantly or potentially negatively impacted investors’ rights, they should prompt the manager to fulfill disclosure obligations. If misconduct such as misappropriation, embezzlement, or loss of contact occurs, custodians must report to regulators promptly. The role of independent auditors, such as accounting firms, is also emphasized to supervise and verify the disclosures.

Chen Li, a director of the China Chief Economist Forum, stated that by clearly delineating the disclosure responsibilities of managers, custodians, and sales institutions, and clarifying related-party cooperation obligations, while leveraging independent audits, the measures establish a “clear division of responsibilities” system that lays a solid institutional foundation for industry regulation and development.

Enhancing Risk Disclosure

The measures strengthen risk disclosure to better protect investors’ rights.

Specifically, they emphasize key risk points in the disclosure process, ensuring investors understand whether private funds are investing according to the fund contract and actual operational activities, and that they can exercise their rights as stipulated, safeguarding their legal interests.

Managers are required to fully and objectively disclose investment operation risks in fund contracts and disclosure documents. For complex or high-risk funds, risks related to investment operations and transactions must be clearly and prominently disclosed. The measures specify detailed disclosure requirements for related-party transactions, derivatives, liquidity-restricted assets, and cross-border investments. They also improve mechanisms for investors to access information, requiring managers to specify contact methods for inquiries about disclosures and procedures for handling situations where managers cannot fulfill disclosure obligations.

Nankai University finance professor Tian Lihui believes that the measures provide a solid legal framework for investors to exercise oversight. By clearly defining the content and frequency of disclosures and strengthening risk warnings, they help investors accurately understand private fund operations, better constrain managers’ compliance, and promote rational investment based on full risk awareness.

Implementing Differentiated Arrangements

The measures set differentiated disclosure requirements based on the operational features of private securities and equity funds.

For private securities funds, disclosures include net asset value, returns, fees, investment assets, liquidity-restricted assets, cross-border investments, and custodian review opinions. For private equity funds, disclosures include net assets, returns, fees, investment targets, and details of new and exited investments. The disclosure frequency is tailored to the specific characteristics of each fund type.

The measures also increase penalties for violations of disclosure obligations. They specify legal responsibilities and penalties for private fund managers, custodians, sales institutions, and other service providers, as well as their personnel, to promote compliance and improve disclosure standards. Penalties will be enforced against violations by shareholders, partners, and actual controllers of private fund managers.

The CSRC stated that moving forward, it will implement the regulations in accordance with the principles of aligning with industry characteristics and enhancing rule hierarchy. It will accelerate the development of regulatory rules covering all aspects of the industry—covering entities, investment activities, supervision, and constraints—building a comprehensive, tiered regulatory framework to solidify the standardized operation of the private fund industry.