The Ministry of Civil Affairs ("MCA") has recently drawn up and issued the Interim Administrative Measures for the Investment Activities of Charities to Maintain and Increase the Value of Property (Draft for Comment) (the "Draft for Comment") for public consultation by January 6, 2018.
The Draft for Comment sets forth in 25 articles the "basic principles", "investment scope, approaches and conditions", "investment decision-making and operations", "control over investment risks", and "supervision and administration", and particularly clarifies three issues, such as "the self-discipline and heteronomy over investment activities". According to the Draft for Comment, for property other than charities' bank deposits and equity donations they have received, all investment activities using such property shall be conducted in only three ways, such as "entrusting professional investment management institutions to manage and operate the property"; also, wealth-management products that could be directly purchased by charities are limited to those products with the lowest risk ratings, that is Level I and Level II in the independent risk assessment. Furthermore, the property of any charity shall not be employed for twelve types of activities, including "being deposited in non-banking financial institutions".