The Securities Association of China ("SAC") has recently formulated and issued the Rules for the Administration of Offline Investors of Publicly Offered Infrastructure Securities Investment Funds (Draft for Comment) (the "Draft for Comment") for public comments by September 29, 2020.
The Draft for Comment mainly covers the following contents: the first is to clarify the registration requirements for offline investors of infrastructure funds. The second is to regulate the behavior of offline investors of infrastructure funds. The third is to consolidate the responsibilities of fund managers and their financial consultants. The fourth is to clarify self-regulation punishment for violations. In particular, the Draft for Comment emphasizes that offline investors should establish a sound internal control system and operating procedures, strengthen the management of practitioners, effectively carry out the pre-enquiry preparatory work, give play to the professional pricing capability, conduct adequate research, and make rational quotation. Meanwhile, the Draft for Comment requires that offline investors of infrastructure funds shall not commit any of the following violations disrupting the order of issuance, such as making a quotation through negotiations with others or in collusion with others, intentionally lowering or raising the quotation, providing a valid quotation but failing to subscribe, and failing to pay the subscription funds in full and on schedule.