Private Equity Fund Information Disclosure Measures Released: Clarifies Disclosure Content and Frequency Requirements, Strengthens Transparent Disclosure

Private Equity Fund Information Disclosure Measures Implemented

On February 27, the China Securities Regulatory Commission (CSRC) issued the “Supervision and Management Measures for Private Equity Fund Information Disclosure” (hereinafter referred to as the “Information Disclosure Measures”), which will take effect on September 1, 2026. The CSRC stated that these measures strengthen the disclosure responsibilities of private fund managers and custodians, standardize private fund information disclosure behaviors, and help improve transparency in private fund operations, thereby protecting investors’ legitimate rights and interests.

As an administrative regulation implementing the “Regulations on the Supervision and Administration of Private Investment Funds” (hereinafter referred to as the “Private Fund Regulations”), the “Information Disclosure Measures” establish and improve the private fund information disclosure system, serving as an important step in strengthening overall regulation and optimizing supervisory arrangements.

The CSRC indicated that moving forward, it will continue to implement the Private Fund Regulations, introduce departmental rules and normative documents focusing on key aspects of private fund operations, and improve the full-process regulatory framework for private funds to solidify the institutional basis for standardized industry operations.

Strengthening Disclosure Responsibilities

The “Information Disclosure Measures” consist of seven chapters and forty-four articles.

Regarding the reinforcement of disclosure responsibilities, the measures clearly state that private fund managers should prioritize the interests of private fund investors and disclose private fund information to investors truthfully, accurately, completely, and promptly, in accordance with regulations and agreements.

The measures further specify the disclosure responsibilities of private fund custodians, who must fulfill information disclosure duties related to custody services, including disclosing the fund custody agreement, regularly issuing custodian reports, reviewing and verifying financial information of private securities investment funds, and providing opinions; clarify the disclosure obligations of private fund sales institutions, which must truthfully, accurately, completely, and promptly disclose information to investors when entrusted with such duties, and must not alter information provided by managers; and specify the cooperation obligations of related parties, who should proactively inform private fund managers of matters related to disclosure, including shareholders, partners, and actual controllers.

Enhancing Transparent Disclosure

The measures also comprehensively specify detailed disclosure requirements and emphasize transparent, “piercing” disclosure.

They clarify that private fund managers should disclose information about the fund’s operation according to the content, channels, methods, and frequency stipulated in the fund contract; specify the types and specific contents of periodic reports for private securities and private equity funds, especially requiring managers to prepare interim reports promptly when significant events occur and disclose them to investors.

To address the longstanding issue of investors’ difficulty in understanding nested investments, Articles 19 and 22 require disclosure of the underlying assets (targets) after piercing through nested investments, while Article 13 mandates cooperation from invested private funds and legally issued asset management products.

Furthermore, the measures encourage voluntary disclosure of additional content. Article 9 states that, beyond the required disclosures, private fund managers may voluntarily disclose additional information based on the fund’s investment scope and targets, provided it does not conflict with mandatory disclosures, mislead investors, or serve marketing purposes through temporary or selective disclosures.

The measures also strengthen disclosure requirements for key risk areas. Article 12 mandates that managers fully and objectively disclose risks associated with private fund investment operations in the fund contract and disclosure documents, especially highlighting risks related to complex and high-risk funds in a clear and prominent manner. Managers must advise investors to make prudent investment decisions based on their risk tolerance, fully understand relevant operational risks, and bear the investment risks themselves. Additional requirements detail disclosures related to related-party transactions, derivatives, liquidity constraints, and cross-border investments.

Clarifying Penalties

The measures specify prohibitions on certain disclosure behaviors, including making performance forecasts, promising that principal investments will not be lost or guaranteeing minimum returns, and engaging in public or disguised disclosures of such information.

Regarding penalties, the measures state that the CSRC and its dispatched agencies can supervise and manage private fund managers, custodians, sales institutions, and other service providers, taking administrative actions such as ordering corrections, conducting regulatory interviews, and issuing warning letters, and imposing administrative penalties in accordance with the Private Fund Regulations and related laws.

Article 38 stipulates that if shareholders, partners, or actual controllers of private fund managers violate Article 32 of the measures, the CSRC and its agencies may impose penalties pursuant to Article 45 of the Private Fund Regulations.

Article 32 requires that shareholders, partners, and actual controllers cooperate with managers in fulfilling disclosure obligations, proactively inform managers of relevant matters, and must not conceal or provide false information, nor organize, instruct, or assist in violations of disclosure rules.

According to Article 45 of the Private Fund Regulations, violations by shareholders, actual controllers, or partners may result in corrections, warnings, or public notices, confiscation of illegal gains, and fines ranging from one to five times the illegal gains; if no illegal gains are obtained or the gains are less than 1 million yuan, fines of at least 100,000 yuan and up to 1 million yuan may be imposed. Responsible personnel may face warnings or public criticism and fines between 30,000 and 300,000 yuan.

(Source: The Paper)