State Council: Strengthen private fund supervision, strictly control the establishment of government funds and irregular behavior

On June 5, the General Office of the State Council issued an opinion requiring strengthened regulation of private investment funds, prevention of risks, and promotion of high-quality development. The document proposes optimizing registration and filing rules, strictly controlling the establishment of new government investment funds, with counties and districts generally not allowed to establish new ones; strictly managing the registration of names and business scopes containing "private fund" and other similar terms. The regulatory authorities will refine risk assessment standards, promote differentiated supervision, increase inspections of key institutions, institutions operating across regions, and behaviors such as illegal entrusted holding and channelization, and strictly prohibit private funds from engaging in illegal lending and "equity disguised as debt." The opinion also emphasizes strengthening the crackdown on illegal fundraising, embezzlement and misappropriation, self-financing and self-use, illegal cross-border capital flows, and participation in illegal fundraising, establishing a "whistleblower" system and a blacklist system, and guiding the standardized development of private equity funds, venture capital funds, and private securities funds to serve technological innovation and resident wealth management by integrating inefficient government and state-owned enterprise investment funds and cultivating patient capital and diversified exit channels.