Guidelines were released last week by the semi-official Asset Management Association of China (AMAC).
They were issued following Fidelity International’s successful registration as a private fund management firm in the mainland on January 3, the first time a global asset manager has done so.
The US-based fund house was granted the WFOE license in October 2015. It allows Fidelity to launch products that invest in China’s secondary market and are aimed at high-net-worth individuals and institutional investors.
The guidelines (in Chinese) said all the trading decisions and transactions have to be done onshore. “For onshore securities and futures trading, independent decision-making is required and trading orders from offshore institutions or systems are not allowed,” it said.
The rules mean each fund management firm has to set up all the operational systems onshore.
The firm needs to file a record to the AMAC 20 days after finishing fundraising for a new product, it noted.
Similar to all domestic private fund securities manager, the number of individual investors cannot exceed 200 for each product, according to the China Securities Regulatory Commission.
The product can also be a fund-of-funds product, according to the guidelines.
Other fund houses including Aberdeen and UBS Asset Management are also hoping to register as a private securities fund manager later this year.
