On July 9, 2023, the State Council released the Regulations on the Supervision and Administration of Private Investment Funds (the "Regulations"), which shall come into force on September 1, 2023.

For detailed analysis on the Regulations, please refer to related articles on our Wechat Public accounts: "Haiwen Observation | Analysis of the Private Funds Regulation: Core Content and Far-reaching Impact of a Decade Milestone in Private Funds Supervision (Part I)"; "Haiwen Observation | Analysis of the Private Funds Regulation: Core Content and Far-reaching Impact of a Decade Milestone in Private Funds Supervision (Part II) ".

On July 14, 2023, the AMAC released and implemented the Measures for the Filing for Private Asset Management Plans of Securities and Futures Operating Institutions ("New Filing Measures"), as the complementary self-disciplinary rules to the Administrative Measures for Private Asset Management Business of Securities and Futures Operating Institutions and the Administrative Provisions on the Operation of Private Asset Management Plans by Securities and Futures Operating Institutions. The Administrative Measures for the Filing for Private Asset Management Plans of Securities and Futures Operating Institutions (Trial) issued on June 3, 2019, were simultaneously repealed.

The New Filing Measures elevates the filing practical experience and mature filing standards to self-disciplinary rules, achieving a systematic, open, and transparent filing standard. It further responds to the practical needs of the industry (including appropriately improving the relevant requirements for equity investment operations), optimizes the filing verification standards and requirements, and aids in controlling the risks of private asset management business, promoting the standardized development of the industry.

On July 21, 2023, the CSRC released the Provisions on Improving the Regulation of Specific Short-term Trading (Draft for Comment) (the "Provisions"). The main contents of the Provisions include:

The Securities Law sets out the principle provisions on the short-term trading system. On this basis, the Provisions summarize the regulatory practice of short-term trading and explicitly stipulate the applicable scope, exemption situations, position calculation by product in case of specific institutional positions, and foreign investor application standards. It helps standardize the regulation of specific short-term trading, stabilize market expectations, enhance transaction convenience, increase the attractiveness of the A-share market, and promote the opening up and high-quality development of the capital market.

On July 31, 2023, the CSRC released the Interim Provisions on Position Management of Futures Market (“Interim Provisions”), the main content of which includes: (1) specifying the principles for formulating or adjusting position limits, the setting methods thereof, and regulating trading behavior; (2) establishing principle regulation of hedging activities, explicitly setting forth the obligations of futures exchanges for approval and management and requiring that hedging position limits should correspond to the scale of traders' risk management activities, market risk tolerance; (3) improving large position reporting system, further enriching the content of reporting and the obligations of reporting party, and specifically authorizing futures exchanges to require traders to submit relevant information regarding their participation in domestic and overseas futures markets, over-the-counter derivative markets, and spot markets; (4) specifying requirements for position consolidation, specifically, requiring futures exchanges to consolidate the positions of the same trader on the same type of trading code  with multiple members and those of multiple accounts where a de facto control relationship exists, and establishing principle rules for exemptions related to position consolidation.

Position management is the core regulatory means and method in the futures market. Based on regulatory practice experience, the Interim Provisions implement the management requirements related to position limits and hedging under the Futures and Derivatives Law, enhance the precision of position management, contributing to regulating futures market position behavior, and promoting the stable operation of the futures market.

In July 2023, the NAFR issued the Guidance on Issues Reflected by the Industry Following the Implementation of the Notice on Regulating the Classification of Trust Business of Trust Companies (I) (the "Guidance") to the trust industry.

The Guidance timely responds to certain issues faced by trust companies in the implementation of the Notice on Regulating the Classification of Trust Business of Trust Companies. It further clarifies certain standards, logic, and elements of trust business classification, differentiates the boundaries of similar trust businesses, and specifies certain investment/raising requirements for some trust businesses, thereby facilitating the standardized development of trust business classification.

On July 24, 2023, the PBOC issued the Administrative Measures for Data Security in the Business Field of the PBOC (Draft for Comment) (the "Administrative Measures"). The scope of application of the Administrative Measures is the data processing activities related to various types of businesses conducted within China that the PBOC undertakes to supervise and manage. The main content of the Administrative Measures includes: (1) standardizing requirements for data classification and grading, specifying that data is divided into three levels: general data, important data, and core data; (2) proposing overall requirements for data security protection; (3) specifying the baseline requirements of security compliance for the full process of data processing activities; (4) detailing compliance requirements for risk monitoring, assessment and audit, and incident handling measures, etc.; (5) clarifying the PBOC's regulatory measures and the legal responsibilities of data processors in cases of violation. Additionally, it is worth noting that the draft explanation of the Administrative Measures points out that clauses such as "important data shall be stored within the territory of PRC" and "declaring security assessments for cross-border transfer of data under prescribed circumstances" are reiterations of legal obligations expressly provided by the promulgated higher-level laws, and without imposing additional compliance requirements.

The Administrative Measures fully articulate related laws and regulations such as the Data Security Law, detailing and clarifying the baseline requirements for data security compliance in the PBOC's business field. They are important supplements to the data security management system in the financial industry, providing a regulatory basis for data security management by data processors in banking industry within the PRC. Furthermore, according to the Administrative Measures and its drafting explanation, the PBOC may issue other detailed regulations on matters related to the protection of personal information in the business field of the PBOC in the future.

On July 21, 2023, the NAFR formulated and revised the Implementation Measures for Administrative Licensing of Non-Bank Financial Institutions (Draft for Comment) (the “Implementation Measures”). The revisions involved focus on the following three aspects:

The Implementation Measures align with newly introduced regulatory systems and policy orientation requirements in recent years, aiming to further strengthen regulatory policy guidance, enhance the quality and efficiency of entry regulation, implement the simplification of administration and the delegation of power, and fulfill the deployment for opening up, which will help to fully stimulate the market vitality of non-bank institutions.

On July 21, 2023, the SAC modified the Implementation Rules for Integrity Practice of Securities Operators and Their Staffs implemented in 2020, and released the revised version (“New Implementation Rules”).

The introduction of the New Implementation Rules helps to enhance the implementation of the integrity system, promote the implementation of the requirements for building an integrity ecosystem within the securities industry institutions, and continuously foster the culture of integrity in the securities industry.

On July 28, 2023, the NAFR issued the Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment), the main content of which includes: (1) clarifying risk governance and management responsibilities, such as defining the specific scope and responsibilities of the three lines of defense in operational risk management, emphasizing that the three lines of defense, as well as within each line of defense, should establish and improve the mechanisms for sharing risk data and information; (2) setting basic requirements for risk management, specifying that banking and insurance institutions should establish basic operational risk management systems, preferences and transmission mechanisms for operational risk, build robust management information systems, and foster a positive management culture; (3) detailing management processes and tools, including explicitly making data security management one of the risk management processes and methods; (4) improving the supervisory and management responsibilities of the NAFR and industry associations.

Operational risk is one of the main risks faced by banking and insurance institutions in their business management. The Administrative Measures for Operational Risk in Banking and Insurance Institutions (Draft for Comment) unify the requirements for operational risk management across various types of banking and insurance institutions, retaining existing good rules and practices, and also introducing more comprehensive and specific requirements in response to issues exposed in practice, and the "matching principle" proposed therein also reflects the overall idea of differentiated supervision.

On July 14, 2023, the AMAC released the Guidelines for Handling the Disappearance of Private Fund Managers (the “Guidelines”), to sort out, standardize, and optimize the process for handling the disappearance of fund managers, the main content thereof includes, among others, (1) shortening the period for public announcement of disappearance (from 3 months to 1 month); (2) adjusting the current practice of suspected disappearance announcements to requiring relevant institutions to promptly report the situation to the AMAC, reasonably reducing market impact; (3) strengthening the punishment measures against  fund managers disappeared, etc.

The Guidelines further standardize the handling process of the disappearance of fund managers and are conducive to protecting the rights and interests of investors. Meanwhile, we also advise fund managers to promptly update the contact information on record with the AMAC, and regularly pay attention to various communication information to avoid missing feedback.

On July 14, 2023, the AMAC released the Self-Regulatory Inspection Rules of the AMAC (“Inspection Rules”), which revised the "Self-Regulatory Inspection Rules of the AMAC (Trial)" and detailed the specific requirements for the implementation of on-site and off-site inspections by the AMAC on private fund managers and their practitioners and other self-regulatory targets.

On July 7, 2023, the PBOC, the NAFR, and the CSRC published an article titled "Urge Rectification of Platform Enterprises’ Financial Business and Improved Normalized Regulation" on their respective official websites. The article stated that most of the prominent issues existing in the platform enterprises’ financial business have been rectified, and the priority of the financial regulatory authorities will shift from centralized rectification to normalized regulation. In the next step, the financial regulatory authorities will step up efforts to upgrade normalized regulation, all types of financial activities will be subject to regulation in accordance with the law, and the same regulatory rules will be applied to the same type of businesses so as to achieve fair regulation; and will implement financial policies and measures to promote the healthy development of the platform economy, to further strengthen their inclusive financial services, to boost technological and financial innovation and to enhance their international competitiveness so as to better support development of the real economy and to meet the needs of the people’s livelihood.