AMAC issued two self-discipline rules
Strengthen the self-discipline management of employees
Ren Ziqing, a reporter from China's ** newspaper.
Recently, the China Investment Industry Association (hereinafter referred to as the Association) revised and issued the "Rules for the Management of Practitioners" and supporting rules and the "Rules for the Registration of Investment Managers of Business Institutions" to further standardize the practice behavior of practitioners and improve the compliance awareness and professional ethics of practitioners.
In this regard, a number of industry insiders believe that these two self-discipline rules will further improve the professional quality and management transparency of practitioners, rectify the work team, protect the legitimate rights and interests of investors, and promote the sustainable and healthy development of the industry.
Strengthen the self-discipline management of employees
Promote the healthy development of the industry
Recently, two blockbuster self-discipline rules revised and released by the association have attracted the attention of the industry. Judging from the content of this revision, Zhou Lin, a partner of Han Kun Law Offices, said that the newly released "Management Rules" have been updated and modified to a certain extent compared with the previous version, but have not changed the original style, but on the basis of the previous "Management Rules", they have been further strengthened in three dimensions: the qualifications and professional conduct norms of practitioners, the management responsibilities of ** industry institutions, and the self-discipline management measures of ** industry associations, so as to consolidate the rights and responsibilities of relevant parties in the industry. On the basis of the original rules, the Registration Rules also integrate and strengthen the registration requirements, performance requirements, personnel flow and information publicity management of investment management personnel, and standardize the registration process, so as to improve the professional quality, moral standards and professional conduct norms of investment management personnel.
Zhou Lin believes that the introduction of these two self-discipline rules is to further strengthen the self-discipline management of practitioners, which is conducive to consolidating the main responsibilities of industry institutions for personnel qualification management, improving the professional standards and management transparency of industry personnel, so as to promote the compliance and steady operation of industry institutions and the healthy, transparent and sustainable development of the industry, and protect the interests of investors.
*The industry is a human resource-intensive industry, and the cultural literacy and professional ability of personnel have a direct impact on the development of the industry. Tang Jinxi, President of Chongyang Investment, believes that the revision of the employee management rules and supporting rules is, on the one hand, to clarify the scope of practitioners, expand the way to obtain professional qualifications, and facilitate the management of talents by industry institutions. Second, at the same time, the main responsibility of the industry institutions has been consolidated. The third is to further strengthen the requirements for the code of conduct of employees, which is not only to implement the spiritual requirements of the first financial work conference, but also to meet the requirements of the construction of industry culture.
Mingshi partners also said that employees are not only the core assets of the company, but also the fundamental guarantee for the healthy development of the industry. Strengthening the self-discipline management of employees not only controls the code of conduct, but also further consolidates and strengthens the industry threshold. Therefore, the introduction of self-discipline rules is conducive to the healthy development of the industry, enhancing investor confidence and protecting the legitimate rights and interests of investors.
The release of heavy self-discipline rules by the industry association has played a great deterrent role in the entire industry, and has also sounded the professional alarm for some misbehaving practitioners. Cui Bo, product director of Grid Fuxin, said that the current market chaos is frequent, and if the industry wants to develop steadily, the rights and interests of investors need to be protected to the greatest extent, and the behavior of practitioners also needs to be standardized. With the introduction of two blockbuster self-discipline rules, it will greatly reduce the financial chaos caused by personal behavior, which has a far-reaching impact on the overall norms of the industry.
Liu Hongjiao, a partner at Beijing Zhong Lun Law Firm, believes that the two new regulations issued by the association further require practitioners to abide by professional ethics, improve professional quality, prevent moral hazards, and further standardize their professional behavior through self-discipline management in personnel appointment, personnel flow and information publicity, which is conducive to the formation of an industry culture of "compliance, integrity, professionalism and stability" in the asset management industry and promotes the sustainable and healthy development of the industry.
The era of strong supervision of the industry has arrived, and the new regulations will further improve the qualification management system of employees, consolidate the management responsibilities of industry institutions, improve the professional quality of employees, promote the compliance and steady operation of industry institutions, and protect the legitimate rights and interests of investors. Zhou Yinglong, general manager of Shenzhen Zhuode Investment, said.
According to Gao Yichao, senior partner of Beijing Jincheng Tongda & Neal (Shenzhen) Law Firm, by strengthening the self-discipline management of practitioners and standardizing the practice behavior of practitioners, the compliance awareness and professional ethics of practitioners, especially managers, investment managers and other investment managers, can be further improved, and the healthy development of the industry can be promoted.
Clarify six prohibited sexual acts
Enrich the ways to obtain professional qualifications
Specifically, the revised and improved content of the "Management Rules" mainly includes: consolidating the main responsibility of the management of employees of institutions, clarifying the requirements for prohibited behaviors of employees, and strengthening the self-discipline and restraint mechanism. Among them, Article 30 of the Administrative Rules clarifies six requirements for prohibited sexual conduct that employees must not have, which has aroused widespread concern.
In this regard, Cui Bo said that the six prohibited behaviors are word-for-word, mainly to impose strong constraints on professional ethics for employees. The management rules mention that the prohibition of unfair treatment of investors, the prohibition of seeking improper benefits, the prohibition of fabricating false information, the prohibition of interfering with supervision and management, the prohibition of extravagant display of wealth, and the prohibition of violating professional ethics and social morality are the focus of market attention.
Zhou Lin told reporters that the six prohibitions are one of the key additions this time. Previously, the association had put forward similar requirements for the public offering industry in the "Self-Discipline Convention on the Construction of Cultural Construction in the Public Offering Industry" issued in April 2023, and this time the association has upgraded it to an industry self-discipline rule through this item, and the scope of application has been expanded from the public offering industry to the entire ** industry, including private placement, aiming to remind and require practitioners to pay attention to professional ethics and social responsibility.
Zhou Lin believes that as a professional management institution in the private equity industry, practitioners are also professional investment management service personnel, and professionalism and dedication are its core competitiveness. If you want to achieve sustainable business development, you should continuously improve your practice ability covering the whole life cycle, perform your duties and responsibilities with the principles of professionalism, dedication and precision, and serve investors.
Compared with the 2022 version of the management rules, this revision clarifies the six requirements for the prohibited behavior of employees, elevates the industry self-discipline convention to the industry self-discipline rules, and guides employees to strengthen their own cultural and moral construction, fulfill social responsibilities, and comply with social morality. Zhou Yinglong said.
Gao Yichao believes that based on the frequent chaos in the industry, especially the lessons of the society caused by the focus on extravagance and wealth display, the six prohibitive behavior requirements not only emphasize that practitioners should abide by the bottom line of laws and regulations, but also put forward higher requirements for their professionalism, professional ethics and social morality, standardize and guide practitioners and personnel to return to their original intentions, do things that are beneficial to investors and the industry with a long-term vision, and promote the healthy development of the industry.
In addition to the six prohibited acts, the Administrative Rules also enrich the ways to obtain professional qualifications in light of the actual situation of the industry, and provide convenient conditions for domestic and foreign professionals to engage in compliance with the law. At the same time, it has also strengthened the self-discipline and restraint mechanism, giving full play to the guidance and deterrence role of self-discipline management measures and disciplinary sanctions, and pursuing the responsibility of violators to the end.
Zhou Yinglong believes that these regulations show that the regulatory authorities and self-regulatory organizations will work together to create a clean and upright ecological environment and promote the construction of the industry's culture to a new level.
In addition, it is clearly stipulated in the Registration Rules that the manager shall not leave at will. Zhou Lin believes that this provision will help protect the legitimate rights and interests of the first share holders, stabilize the first management team, avoid the interests of investors from being affected by unnecessary fluctuations, and help build a more stable, transparent and reliable industry environment.
In recent years, the flow of talents in the industry has accelerated, and the situation of leaving and leaving at will has occurred from time to time, which has reduced the credibility of the industry. Gao Yichao said that the "Registration Rules" are applicable to investment managers in business institutions, and private equity entities are not applicable, but private equity should also be used as a reference to regulate their own behavior.
Cui Bo also said that in recent years, there have also been investors who change their managers after a short period of time and have not passed the lock-up period, which has also brought a lot of trouble to investors. The "Registration Rules" also restricts the manager from leaving at will, and from the rules released this time, it clarifies the association's firm attitude towards the protection of investors, and also makes a super-mandatory contract for the first practitioner.
Interpretation of the "Proposal for the Construction of Culture in the Private Equity Industry":
Private equity strengthens talent training and team building, and carries out compliance operations in various aspects
Wu Jun, a reporter from China's leading newspaper.
Recently, the China Investment Industry Association issued the "Proposal for the Cultural Construction of the Private Equity Industry" (hereinafter referred to as the "Proposal"), which has attracted market attention. It is mentioned that private equity managers should strengthen talent training and team building, perform their duties and responsibilities with the principle of professionalism and dedication, and serve investorsAt the same time, it is necessary to strictly abide by the relevant rules and regulations, operate in compliance with regulations, and develop business steadily.
A number of private equity institutions said that they have adopted an independent training model to cultivate investment and research talents, build talent echelons, and improve professional capabilitiesAt the same time, we will establish a compliance business philosophy and strictly control the risks of investment and operation in business links, so as to promote long-term development through compliance.
Strengthen talent training and team building
Enhance professional capabilities in investment and research
The proposal mentions that private equity managers should be supported by high-quality specialization, keep in mind that professional focus is the core competitiveness of the industry, strengthen talent training and team building, and forge professionalism.
In terms of talent training, Tang Jinxi, president of Chongyang Investment, said that the company has been recruiting since 2006, and it should be the earliest company in the private equity institutions to implement school recruitment. The company has a systematic talent training and selection mechanism, such as the current investment managers, all of whom start from researchers, then manage the training funded by the company itself, and finally participate in the management of money for customers after selection. The company carries forward the corporate culture of "sincerity and wisdom", advocates team members to collaborate, share, be honest, humble and open-minded, continuously promote institutional construction, attach importance to transparency, attach importance to system construction and system implementation, and implement the mechanism arrangement of entering and leaving, and being able to go up and down. In terms of investment research, there is a morning meeting system and an investment research interactive meeting system, which advocates exchanges and collisions, advocates transparent information communication, continuously strengthens the concept Xi of value investment and long-term investment, and continuously improves professional ability through learning, discussion and practice.
Xingshi Investment said that the company adopts an independent training mechanism. Xingshi continues to practice the investment and research model of "multi-manager team system", and there are 6 first-class managers, with an average of more than 16 years of experience, basically from independent training. In addition, there is an existing investment research team of about 40 people, and we continue to build an echelon investment research team through independent training to maintain the youth and sustainability of the investment research system. Xingshi provides an attractive path of rapid growth, all investment research fresh graduates in the independent training + mentor system, starting from researchers, will be assigned to an industry first, when the industry research is good enough, through the annual assessment can expand the research industry;Excellent researchers can be promoted to ** manager, first get a small part of ** investment, if the performance appraisal continues to meet the standard, and then further expand the investment authority. "Under the Xingshi talent cultivation system, every researcher has the potential to eventually grow into a manager, and the managers who grow up through this path have deep industry research experience as the foundation. In addition, Xingshi advocates a dedicated, pure investment and research culture, and provides a flexible incentive mechanism. ”
Zhou Yinglong, general manager of Shenzhen Zhuode Investment, said that the company implements strategic diversification, covering major types of assets such as **, bonds, and commodities, and is committed to providing full-cycle and all-round asset management services. At present, the team is mainly composed of post-80s and post-90s employees, with rich industry experience, and can also lead the old with the new and internal training to form a good talent echelon foundation.
In terms of improving professional capabilities, Xingshi Investment said that it mainly relies on several points: first, it does not rely on a certain star manager, relies on the power of team investment, and adopts a multi-manager co-management model;Second, do not rely on a single market style, build the ability to invest in the whole market, and tap diversified income**;Third, it does not rely on a single ** and improves the certainty of the portfolio. "For Xingshi, the investment targets available in the whole market are extremely broad, and after finding the strongest driving factors, we will evaluate their return-risk ratios and continue to dynamically adjust the portfolio. In this way, the dependence of the Xingshi investment research system on a few ** is very weak, but it will continue to dig and track better ** to improve the certainty of the portfolio. ”
Fengjing Capital said that the company's top managers are born in the 70s and 80s, and the researchers are born in the 90s, and the team always attaches importance to the construction of talent echelon. The improvement of professional ability comes from long-term and persistent investment on the one hand, and from the continuous iterative upgrading of the team's research framework system on the other hand. The company will discuss the problems existing in the research work from time to time, sort out the logical framework, expand the depth of research, and strive to improve the work efficiency of the team.
We have participated in many due diligence projects for private equity managers in the past, and many of them have some common contents, such as the company's founders and senior executives insist on working on the front line and leading the team to continue to deepen the development of the industry and professional managementThere are also many managers who have set up complete, detailed and non-standard management system documents, which are clarified from various aspects such as personnel employment, specific employment requirements, incentives and constraints, compliance requirements, and non-competition. Zhou Lin, a partner at Han Kun Law Offices, said frankly.
Establish a compliance concept and control risks
Private equity carries out compliance operations from various aspects
In terms of compliance management, the "Proposal" makes it clear that it is necessary to adhere to the essential requirements of private placement, strictly abide by the bottom line of the industry such as the qualified investor system, and put an end to all kinds of violations of laws and regulations.
In terms of doing a good job in compliance management, Tang Jinxi said that the first is to adhere to the concept of compliance, advocate a compliance culture within the company, and really pay attention to compliance requirements starting from the company's managementSecond, it is necessary to sort out the compliance risks of all business links, find out the risk points, and guide the business departments to conduct business in complianceThird, it is necessary to carry out continuous compliance training, continuously update compliance requirements to business departments and practitioners, and instill compliance conceptsFourth, it is necessary to conduct regular compliance self-inspections, and timely discover and correct them.
The company has established a strict and effective multi-level risk prevention system, and has a compliance committee to be fully responsible for the company's compliance management, and the chairman of the compliance committee is the person in charge of compliance and risk controlAt the same time, the Supervision and Audit Department and the Risk Management Department are set up, which are respectively responsible for assisting the person in charge of compliance and risk control to conduct regular and irregular inspections, supervision and evaluation of the implementation of the company's internal control system, as well as risk measurement and risk assessment of all investment portfolios of the companyIn addition, through internal training, employees are raised to be aware of compliance. In terms of investment, we strictly evaluate and inspect the investment risks before, during, and after the event. Before investing, risk control will be carried out in the method and investment research system setting, and the first-class pool management system will be strictly implementedDuring the investment period, in addition to closely tracking the target, the trading department strictly abides by the trading specifications;After the investment is completed, compliance risk control checks, portfolio risk assessments and soft constraint checks of other systems will be conducted.
In the view of Bamboo Run Investment, as a private equity manager, it is not only necessary to establish a sound internal control system, but more importantly, to cultivate the compliance awareness of all employees, from passively complying with laws, regulations and regulatory provisions to actively understanding the compliance risk points of various businesses, so as to better maintain the bottom line of compliance while developing business. Mingshi partner ** also said that first of all, we must master the rules and clearly know where the bottom line is, so that we can abide by the law if we understand the law;Secondly, it is necessary to strengthen daily management and supervision, do a good job of reminders and investigations, and control the outbreak time of compliance risks at the beginningThird, it is necessary to provide effective compliance training, do a good job in case analysis, and improve the identification and judgment ability of investment managers.
Fengjing Capital believes that it is necessary to establish various and perfect systems in accordance with the requirements of the "Investment Law" and the "Guidelines for Internal Control of Private Investment Managers".Then arrange special personnel, such as the person in charge of compliance and risk control, to implement various systemsIn addition, strengthen the training and supervision of employees. Zhou Yinglong said that private equity managers must pay attention to the construction of compliance systems, do a good job of self-discipline inspections in daily operations, strengthen risk control management, and strictly prohibit behaviors that harm the interests of investorsAt the same time, it is necessary to rely on the system to manage enterprises, strengthen the construction of corporate culture, build a scientific and reasonable long-term assessment incentive and income distribution mechanism, do not rush for quick success, and adhere to the priority of investors' interests.
Cui Bo, product director of Grid Fuxin, also said that for private equity, compliance and standardized operation are the bottom line. You can't exaggerate the publicity for the sake of fundraising, and you can't break the compliance boundary for personal gain. Private equity managers shall do a good job of self-restraint, internal control, and issue corresponding punishment mechanisms for those who cross the line.
From the perspective of lawyers, Zhou Lin said that first of all, managers and their personnel should have compliance awareness, continue to Xi and implement the requirements put forward by regulatory and self-regulatory organizationsSecondly, the manager itself needs to continue to operate in compliance, formulate and fully implement various management systems based on the actual situation, and improve the professional ethics, code of conduct and professional ethics of employeesIn addition, managers should exercise due diligence and select partners when cooperating and investing externally, so as to develop their business steadily.
Liu Hongjiao, a partner at Zhong Lun Law Firm in Beijing, also said that at present, there are systematic legislative rules for asset management, and the most important thing for private equity managers is to fully implement compliance awareness and strict implementation of compliance requirements, so as to promote long-term development through compliance.
Gao Yichao, a senior partner at Beijing Jincheng Tongda & Neal (Shenzhen) Law Firm, said that it is necessary to strengthen the continuous tracking and implementation of industry laws, regulations and regulatory policies, prudently conduct due diligence and select professional and honest business partners, strengthen the effective support of relevant system operation, process monitoring, information systems, personnel positions, etc., and continuously improve the internal control system and supervision mechanism. Establish and improve the background investigation mechanism for personnel recruitment, and strictly control the selection and employment of personnel.
Under the market downturn, there is an "involution" of private placement fee reduction
Rate differentiation is becoming more and more apparent
China ** newspaper Jiang right.
Under the general trend of lowering the management fee rate of public offerings, the fee model of private placements has also attracted attention. Private equity companies have also given investors a more friendly fee model, such as reducing management fees, raising the back-end fee threshold, etc., and the differences between different types of private equity fee models are also more obvious and refined.
Private placement rates have also been reduced
More investor-friendly
In the second half of this year, under the background of the general reduction of the management fee rate of the public offering, the charging model of the private offering has also attracted attentionRecently, the latest industry initiative released by the AMAC also stated that the performance remuneration of private placement should adhere to the priority of investors' interests. It is reported that some private placements are also adjusting their charging methods, and the fee collection is moving towards a more investor-friendly direction. Compared with the mainstream fixed management fee charging model of public offerings, private investment is usually a fee model of management management fee + performance commission, of course, public offerings and private offerings have subscription fees and redemption fees.
Regarding the charging method of private placement and the fee reduction that occurred this year, a well-known private equity person said that charging a certain management fee not only ensures the daily operating expenses of the manager and the stability of employees, but also avoids the manager's favoritism over the product to a certain extent. This year's fee reduction is not the first time in the industry, and a number of private placements have previously issued products with 0 management fee + pure performance remuneration + closed period model.
Liu Hongjiao, a partner at Beijing Zhong Lun Law Firm, said that there is indeed a situation of private placement fee reduction, and in the context of a weak market and the performance of the investment side does not meet expectations, choosing to reduce fees and partially benefit investors is also conducive to stabilizing the private equity market. With the intensification of industry competition, the increase in the number of supply, and the increasing maturity of investors, the adjustment of rates is also in line with the law of the market under the game of supply and demand and industry competition.
Lowering the fee rate helps to share the risk with investors. Zhou Yinglong, general manager of Shenzhen Zhuode Investment, said that the company's current stock products are mainly fixed income, with low product rates, and at the same time set up a threshold for no performance remuneration for the part of the annualized income below 8%, and the fee will be reduced in advance, reducing the rate can reduce the holding cost of investors, and can also reflect the investment risk shared by private equity managers and customers from the emotional aspect, increase investor enthusiasm, and support the good and limit the bad in the anti-risk ability of private equity managers.
Gao Yichao, a senior partner at Beijing Jincheng Tongda & Neal (Shenzhen) Law Firm, said for example that the recent fee reductions are mainly concentrated in some small and medium-sized private placements, because the 28 rule of the industry is becoming more and more obvious, and it is difficult for small and medium-sized private placements to raise funds.
Gao Yichao believes that at the moment when the market is sluggish, appropriate fee reductions are indeed conducive to the interests of customers, is conducive to reducing redemptions, and guides investors to hold for a long time, which has a certain positive effect. However, we should also focus on differentiated development, highlight the long board, and return to the origin, that is, product performance.
Some private equity companies said that they should improve their investment capabilities and investment performance, and Mingshi Partners** believes that the best way to attract or retain customers is to create positive returns and achieve asset appreciation, which is the motivation for managers to focus on development, rather than just considering reducing fees or other concessions to achieve the goal of customer acquisition. In the long run, as well as from the practice of well-known institutions, strong investment ability and good performance are the aspects that customers are most concerned about.
The above-mentioned well-known private equity people said that from the previous situation of 0 management fee products, the net value performance has been uneven over the past few years, indicating that the level of management fees, whether to collect or not to collect, does not constitute the main reason for determining product performance. In the future, the development trend of the industry will be the traditional model of management fee + performance remuneration, but at the freezing point of the market, the competition in the rate may be more fierce than in the past, but this does not mean that investors will get better investment returns and experience if they choose products with low fees.
Private placement rates are more flexible
Fees vary greatly depending on the strategy
Private placement** for specific investors has greater flexibility in fee collection, and the rate charging mode of various strategies and products is also quite different, and industry insiders believe that the differentiation of rates for different products should be a long-term trend.
Cui Bo, product director of Grid Fuxin, said that the private equity management fee and performance remuneration are slightly different according to different strategies, and generally speaking, the management fee of the first major strategic products is 15%-2.0% range, the performance remuneration is 20% of the profit part, and some quantitative index enhancement products will have the method of over-accruing the benchmark index, and the performance remuneration is 20% of the excess. The management fee of high-yield bonds and convertible bonds is in the range of 1%-2% annualized, and the back-end performance remuneration may be set to accrue standards, such as 20% for annualized performance remuneration of more than 8%. Most of the pure debt management fee products will be less than 1%, and the back-end performance remuneration will be lower or even non-charged. Of course, the specific charging standard needs to be subject to the specific product contract. Some private placements said that the rate of customized products will be preferential, but the minimum investment amount is also much higher than the general threshold of 1 million.
Zhou Yinglong also said that the overall fee standard of the private equity industry is relatively transparent, mainly for the withdrawal of management fees and performance remuneration, but customized products and FOF and other institutional direct investment are slightly different, and some products with a long closure period will also set a certain annualized income exemption threshold. There are certain differences between different strategy products, and the difference mainly lies in the business strategies of different companies, such as some set the threshold for withdrawal, do not accrue below the threshold, and withdraw 30-60% for the part exceeding the threshold, and some implement a step-by-step gradual increase in performance remuneration withdrawal.
With the development of the market, the fee differentiation of private placements is becoming more and more diversified. Liu Hongjiao said that at present, there is a large difference in rates in the market, and the traditional model of fixed management fee rate of 2% + back-end excess 20% commission has been broken, and the management fees and performance remuneration of different types of products (such as partial equity or partial debt) and different strategy products have been very different.
Edit: Captain's Review: Muyu.