Wholly Foreign Owned Enterprises commencing fund management activities in China

Published on: Oct 20th, 2016

On 30 June 2016, the Asset Management Association of China (“AMAC”) – the self-regulatory organisation representing the fund management industry in the People’s Republic of China – released an FAQ titled Registration and Record-Filing of Private Funds (No. 10) under approval of the China Securities Regulatory Commission (“CSRC”). FAQ No. 10 confirms that foreign financial institutions may engage in fund management activities in China by establishing a wholly foreign owned enterprise (“WFOE”) in China and sheds light on issues regarding the required registration procedures to commence trading. This represents a significant movement by the Chinese regulatory authorities to further open up the Chinese funds market, beyond the joint venture structures that have previously been the sole route by which foreign firms could engage in fund management activity in China.

In this article, Sandra Lu of Llinks Law – a Greater China law firm specialising in assisting international financial institutions through the complex Chinese legal system – explains the background to and content of FAQ No. 10 and explores the pre-requisites and practicalities of registering a wholly-owned fund management business in China.

For further information, please contact Derek McGibney (+852 3478 7378) or Matthew Crisp (+44 20 3141 9644).

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