The latest reminder: the information submitted by the private fund manager in the AMBERS system is inconsistent with that of the industry and commerce, and needs to be corrected in a timely manner to ensure the unification of the two

Association push reminder notice

On July 26, 2024, the Asset Management Association of China (hereinafter referred to as the “Association”) sent a notice to some private fund managers (hereinafter referred to as the “Manager”) entitled “Reminder on Submitting Information Change to the Association - Investor Inconsistency”, in order to urge the managers to complete the information change in accordance with the requirements of the Association.

From the content of the reminder, it is speculated that the association compared the investor information filled in by the manager on the AMBERS system with the business registration information, and the comparison time was as of May 21. That is, if there is a difference between the investor information and the business registration information filled in by the manager in the AMBERS system, it is possible to receive a reminder notification pushed by the association.

In the reminder notice, the association pointed out the following three types of situations that need to be self-examined:

01. The investor's business registration information has been changed, but the corresponding investor information has not been changed in the Association's AMBERS system;

02, the investor has not changed in substance, but the investor's business name has changed and has not been synchronously changed in the Association's AMBERS system;

03. The investor's business registration information is inconsistent with the Chinese and English names of the information filled in by the association.

In view of the above situations requiring self-inspection, the association requires the manager to carry out self-inspection and self-correction in accordance with the requirements of the Measures for the Registration and Filing of Private Investment Funds and the supporting guidelines, and timely complete the information change procedures or modify the industrial and commercial registration information to the Association to ensure that the industrial and commercial registration information is consistent with the content filled in the AMBERS system. If the subsequent manager still fails to perform the corresponding information change procedures in a timely manner as required, the Association will be publicized in accordance with the provisions, and as the case may be, take a written warning, require a time limit to correct, publicly condemn, suspend the handling of the record, restrict related business activities, cancel the registration of the manager and other self-management or disciplinary measures.

It is worth noting that the Association also provides the query option of “Manager filling in information inconsistent with industry and commerce” on the classified query page of private fund managers:

The author anticipates that the comparison between AMBERS system and business registration will become a regular action of the association, and managers need to pay close attention to the consistency of the two systems in the future. In case of inconsistency, an application for change of major matters shall be filed in a timely manner.

Different situations and requirements of investor changes

According to the Measures for the Registration and Filing of Private Investment Funds, combined with the proportion of investment, shareholders are mainly divided into controlling shareholders and major investors. This paper will sort out the specific change requirements of different investors:

01、involving the actual controller, controlling shareholder change

If the actual controller and controlling shareholder (sometimes the two are not uniform) change, the manager shall, within 30 working days from the date of change, complete the change procedures and submit a legal opinion to the Association.

1. If the controlling shareholder changes, it is necessary to submit a special legal opinion on the change of the controlling shareholder. The controlling shareholder shall meet the following requirements:

(1) More than 5 years of experience in operation, management or asset management, investment or related industries.

(2) In the last five years, he shall not engage in any business that conflicts with the management of private funds, and shall not serve as an unaffiliated private equity manager.

(3) Have a good credit history.

2. In the event of a change in actual control, the Association will conduct a comprehensive verification of the new manager in accordance with the registration requirements, and a comprehensive legal opinion shall be issued. In addition, if the actual control of the manager is changed, it shall not be transferred within 3 years from the date of registration of the change; At the same time, the average monthly management scale of the 12 months prior to the date of change shall continue to be not less than 30 million yuan.

Summary: If the actual controller is changed, it is necessary to conduct a comprehensive verification and sorting according to the requirements of the new manager, and the management scale can only be promoted after nearly 12 months of continuous management scale above 30 million; If only a change of controlling shareholder is involved, the Association's requirements for controlling shareholders must be met.

02、the main investor change

According to the provisions of the Measures for the Registration and Filing of Private Investment Funds, the main investor refers to the shareholder or partner who holds more than 25% of the equity or property share of the private fund manager.

If the principal investor of the manager is changed, the manager shall, within 10 working days from the date of change, go through the formalities for the change to the Association. The main investor shall satisfy:

(1) In the last five years, he shall not engage in any business that conflicts with the management of private equity funds, and shall not serve as an unaffiliated private equity manager.

(2) Have a good credit history.

Summary: Only the change of the main investor does not need to issue a legal opinion, but needs to meet the requirements of the association for the main investor.

Special note: For the change of investor of minority shareholders (holding less than 25%), the change formalities should also be completed within 10 working days from the date of change to the Association. The association has no special requirements for minority shareholders. However, the author still suggests that minority shareholders check with reference to the requirements of major investors to avoid the failure of change affecting the exhibition industry.

03、Special shareholder changes

When sorting out shareholder changes, the author takes into account the following situations: the same controlling shareholder controls two or more private fund managers, involves foreign shareholders, is controlled by a listed company, and shareholders in other financial institutions part-time. Due to space constraints, for the above and other special changes that are not listed, if you have any questions or need to discuss, please contact the author through the contact information at the end of the article.

The compliance path of the investor change

According to the notice of “Reminder on Submitting Information Changes to the Association - Investor Inconsistency” pushed by the Association to the manager, the manager's main compliance point is to align the AMBERS system with the business registration. According to the author's practical experience, the compliance path is divided into the following two forms:

1. Adjust the AMBERS system to be consistent with the business registration information

This change method is applicable to the shareholders who have changed in full compliance with the corresponding requirements, and can provide proof of assets that meet the amount of subscribed capital and proof of the source of paid-in capital.

Here it is necessary to remind the managers to pay attention to: in practical operation, the proof of the source of investment has become the high-frequency feedback point of the association in the process of change. The focus of the association's attention is whether the shareholder actually has the ability to make capital contributions that match the amount of capital subscribed, and whether the paid-in capital is his own capital, rather than held on behalf of others.

If it involves the change of the actual controller and controlling shareholder, it is necessary to contact the lawyer in advance to do the due diligence work and issue the legal opinion.

2. Adjust business registration information to be consistent with the AMBERS system

This change method is applicable to the situation where the shareholder to be changed does not meet the corresponding requirements/cannot provide sufficient proof of investment. At this time, in order to ensure that the manager can normally expand the business, the shareholder to be changed can be persuaded to make investment after meeting the requirements, and the equity change can be restored first to ensure that the business registration information is consistent with the AMBERS system.

Here, it is necessary to remind the manager to pay attention to: equity transfer needs to be a true expression of intention between shareholders, and there can be no equity arrangements such as equity enfranchisment and yin-yang contract.

Managers who choose this method should comprehensively assess the risks of equity transfer and subsequent changes, and make risk prevention in advance to avoid affecting the normal exhibition business.

Other compliance operation reminders

On August 5, 2024, the Association again sent the “Notice on Urging and Reminding Private Fund Managers to operate in Compliance” to the managers. It is reiterated that the manager needs to make timely rectification for cases where the contents filled in by the AMBERS system are inconsistent with the industrial and commercial registration information, there are less than 5 full-time employees, there is a shortage of senior management personnel, major changes in the fund and liquidation is not reported in time. All managers are requested to improve compliance awareness and check themselves in view of the above situation.

Summary

The change of the investor belongs to the major changes stipulated by the Association, and it needs to be manually reviewed. If the change is not made, the Association will take written warning, require correction within a time limit, publicly condemn, suspend the handling of the record, restrict related business activities, cancel the registration of the manager and other self-management or disciplinary measures according to the seriousness of the circumstances.

The manager who has received the Reminder on the implementation of Information change submission procedures to the Association - Inconsistency of Investors should attach great importance to the relevant requirements, self-check whether there is a corresponding situation and evaluate the corresponding situation, and make corresponding changes as soon as possible to meet the requirements of the association and avoid affecting the subsequent normal exhibition business.