Only two companies were allowed to register as private fund managers (PFMs) in China in May, down from 139 the previous month, as tighter regulations governing the $2.9 trillion industry took effect on the first day of May, reports Caixin. The two firms, Juhai Venture Capital Management and Zhejiang Jintou Dingxin Private Fund Management, have been registered as managers of private equity and venture capital funds, according to the website of the Asset Management Association of China (AMAC).
Both firms fulfilled the new registration requirement to hold at least RMB 10 million ($1.4 million) in paid-in capital, which is up from a minimum of RMB 2 million under the old regulations.
The higher capital requirements are part of the new rules that upped the ante for companies seeking to register as PFMs, as well as newly established private funds. The final version of the rules was released in February by the AMAC, a fund industry group overseen by the country’s top securities regulator.