New regs for asset management on PE to invest in PPPs

On 18 March 2018, the CPC First Plenary Session of the Committee for Comprehensively Deepening Reform, chaired by President Xi Jinping, deliberated and passed the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions. On 27 April, the official version of the guiding opinions was formally released. The guiding opinions consolidates the regulatory standards for the assets management business and becomes a notable regulation that marks a new era of asset management.

The guiding opinions and PPP new policies. The publishing of the guiding opinions is a key step to prevent and contain financial risks, to guide money flowing to the real economy, and to better serve in economic transition and structural optimization. Meanwhile, the new public-private partnerships (PPP) policies also try to prevent PPP projects from turning into new financing platforms, and control the increase of local government debt. Those policies are essential to prevent systemic financial risk, as well as the guiding opinions.

Implications of guiding opinions on PE to invest in PPP projects. Along with the publishing of the guiding opinions is the paradigm that PE participating in PPP projects will be mainly affected in the following aspects.

WANG JIHONG is a partner and TANG HONGWEI is a senior associate at Zhong Lun Law Firm