The China Securities Regulatory Commission ("CSRC") has recently issued the Guidelines for Engagement of Publicly-offered Securities Investment Funds in the Lending of Refinancing Securities (for Trial Implementation) (the "Guidelines"), and on the same day, the Asset Management Association of China ("AMAC") released the Guidelines for the Financial Accounting and Valuation for Engagement of Securities Investment Funds in the Lending of Refinancing Securities (for Trial Implementation). Both guidelines have taken effect immediately from the date of issuance.
Major contents of the Guidelines touch upon four aspects as below. First, basic principles for the engagement of publicly-offered funds in the lending business and the responsibilities of each party engaged in the lending business, are clarified. Second, the engagement of publicly-offered funds in the lending business is clearly defined and the nature of such engagement is made clear. Third, specific types of products as well as the corresponding investment ratio are provided for, liquidity risk management and control will be intensified, and fund managers will be required to ramp up management of credit risks and related-party transactions. Fourth, definite requirements for valuation, accounting, information disclosure, legal documents are set out.