CSRC Unveils Draft Rules Raising Investor Thresholds for Private Funds

The China Securities Regulatory Commission (CSRC) has released draft administrative measures governing private investment fund fundraising, establishing clearer accreditation standards and tightening oversight of fund managers and distributors. Published for public consultation through October 4, 2026, the rules reinforce the principle of seller responsibility and buyer self-reliance. They set standard eligibility criteria for individuals while sharply raising net worth and experience requirements for products targeting real estate equity, single assets, offshore investments, and over-the-counter derivatives. The proposal also enforces look-through audits to uphold China's statutory 200-investor cap.

The draft rules create a unified administrative framework for private fund distribution, directly impacting fund managers, third-party distributors, and high-net-worth individuals. By doubling net worth and experience hurdles for single-asset and complex derivative strategies, regulators aim to curtail illicit capital pooling and conduit schemes, accelerating market consolidation among private fund managers.

China's securities regulator has unveiled draft rules aimed at overhauling how private investment funds raise capital, introducing stricter investor accreditation criteria and tightening operational obligations for managers and sales agencies. The China Securities Regulatory Commission published the draft Administrative Measures for the Supervision and Administration of Private Investment Fund Fundraising for public consultation, with feedback open until October 4, 2026, according to Xinhua and Securities Times. The framework centers on the principle that sellers must perform their duties diligently while buyers assume their own investment risks, seeking to curb misconduct at the entry stage of fund operations. Under the proposed measures, individual accredited investors must possess at least two years of relevant investment experience in securities, funds, futures, or equity, or have served as senior executives at relevant institutions. In addition, individuals must satisfy at least one financial benchmark: household financial assets of no less than 5 million yuan (approximately $705,000), household net financial assets of at least 3 million yuan, or an average annual income exceeding 500,000 yuan over the past three years. For legal entities, net assets must reach at least 10 million yuan at the end of the preceding fiscal year. Regulators have instituted higher barriers for funds with elevated risk profiles, such as those investing in real estate project company equity, single underlying targets, overseas assets, or over-the-counter derivatives. Individual investors in these specialized vehicles must have at least four years of investment experience, alongside household financial assets of at least 10 million yuan and household net financial assets of at least 6 million yuan. Across all private funds, the draft mandates a minimum single-fund investment of 1 million yuan, with the initial paid-in amount also required to be at least 1 million yuan. The total number of investors in any single fund may not exceed 200 at any point. Fund managers and third-party distributors must conduct look-through verifications to ensure that nested or structured arrangements do not breach accreditation thresholds or the statutory investor limit. The draft also tightens requirements around dedicated settlement accounts and supervision entities, demanding stronger internal controls to ensure raised capital remains secure throughout the offering process.