Core Insights - Over 800 private equity firms have deregistered in 2023, with more than 50% of these being voluntary deregistrations, indicating a trend towards industry self-regulation and improved compliance standards [1][3] Group 1: Deregistration Trends - As of September 19, 2023, a total of 851 private equity fund managers have deregistered, with 449 voluntary deregistrations and 332 deregistrations initiated by the association [3] - In comparison to last year, where over 1200 firms deregistered with only 35% being voluntary, the current year shows a significant increase in voluntary exits [1][3] Group 2: Industry Environment - The increase in voluntary deregistrations reflects a purging of the industry, with many firms reassessing their operational capabilities and either enhancing their strengths or choosing to exit [3][4] - The competitive landscape among private equity firms is shifting, with a focus on compliance, risk management, and long-term investor interests rather than just short-term performance [4][5] Group 3: Compliance and Risk Management - There is a notable rise in compliance awareness among private equity firms, with many actively seeking to improve their compliance and risk management frameworks [5][6] - Firms are establishing robust internal controls and risk management systems, emphasizing the importance of adhering to regulatory standards to ensure sustainable growth [6]

Core Viewpoint - A significant private equity firm, Hongchou Investment, has been placed on a restricted list for offline investors for six months due to multiple regulatory violations identified during a self-discipline inspection by the China Securities Association [1][2]. Group 1: Regulatory Violations - Hongchou Investment was found to have eight types of violations, including inadequate decision-making processes, insufficient pricing basis, and lack of a robust research report mechanism [2][3]. - The Shanghai Stock Exchange previously noted two major violations by Hongchou Investment during its participation in offline inquiries for initial public offerings (IPOs): inadequate internal controls and insufficient internal research [2][3]. Group 2: Industry Trends - Several private equity firms, including Ningquan Asset and Yingfeng Capital, have also faced restrictions this year for similar violations in their IPO bidding processes [1][3]. - The regulatory environment is becoming increasingly stringent, prompting private equity firms to enhance their compliance levels and internal control systems to ensure sustainable growth [4][5]. Group 3: Compliance Measures - A recent amendment to the rules governing offline investors in IPOs has explicitly prohibited eleven types of behaviors, including false reporting and collusion with issuers or underwriters [4]. - Industry experts emphasize the necessity for private equity managers to strengthen compliance across all investment processes to navigate the evolving regulatory landscape effectively [5].

Core Viewpoint - Recent regulatory scrutiny has intensified across multiple regions in China, focusing on self-assessment and compliance within private equity firms, with specific deadlines set for completion of these evaluations [1][4][5]. Group 1: Self-Assessment Requirements - The self-assessment process includes three main areas: company basic conditions, fund operation conditions, and the status of unregistered partnership enterprises [1][2]. - For company basic conditions, firms must verify their office space, employee count, and compliance with registration requirements for changes in key personnel [1]. - Fund operation conditions cover compliance in areas such as promotional activities, risk assessment, and investment operations, with specific requirements for different types of funds [1][2]. Group 2: Regulatory Notifications - Various regions, including Guangdong and Zhejiang, have issued notifications requiring private equity firms to complete self-assessments by specific dates, focusing on compliance in fundraising, investment operations, and internal controls [4][5]. - The notifications emphasize the importance of accurate information disclosure and the need for firms to address any potential compliance issues [4][5]. Group 3: Compliance and Enforcement - The regulatory bodies plan to conduct random checks on the self-assessment results, with a focus on ensuring that firms adhere to legal and regulatory standards [6][7]. - There is an expectation that firms will maintain thorough documentation of their compliance efforts, as failure to do so may result in stricter penalties [7]. Group 4: Industry Trends - The tightening of regulations is seen as a move to eliminate non-compliant small and micro private equity firms, with a significant number of firms already having been deregistered this year [7][8]. - The revised regulations from the Asset Management Association of China have increased the minimum fundraising requirements for single funds, further constraining the operational space for smaller firms [8].