In line with our expectation, m88 casino first foreign-owned private securities investment fund manager (“WFOE PFM”) - FIL Investment Management (Shanghai) Company Limited, a wholly foreign-owned enterprise (“WFOE”) of Fidelity, obtained m88 casino registration at m88 casino beginning of 2017, six months after m88 casino WFOE PFM policy was announced in June 30, 2016. On January 4, 2017, m88 casino Asset Management Association of China (“AMAC”) announced m88 casino registration of m88 casino first WFOE PFM. Meanwhile, m88 casino AMAC published m88 casino Illustrative Guidance for m88 casino Registration and Filling of WFOE and Joint Venture Private Securities Investment Fund Managers (“Illustrative Guidance”) on its website. m88 casino Illustrative Guidance provides guidance through illustration on m88 casino registration and filing related matters of WFOE PFM, and sets out detailed requirements for m88 casino legal opinion on m88 casino registration of a WFOE PFM.

It is anticipated that an increasing number of qualified foreign institutions will apply for m88 casino PFM registration in 2017. We also believe that Chinese regulators will honor m88 casinoir commitments to welcome more foreign securities fund managers to enter m88 casino Chinese market.

To register as a WFOE PFM, an applicant shall first log into m88 casino Asset Management Business Electronic Registration System (https://ambers.amac.org.cn), and according to m88 casino Illustrative Guidance, enter m88 casino following information, (1) basic information of applicant; (2) business rules; (3) financial license and affiliates of applicant; (4) credit information; (5) financial information; (6) foreign shareholder information; (7) de facto controller information; (8) senior executive information; and (9) a legal opinion on PFM registration.

Compared to m88 casino requirements for m88 casino legal opinion on m88 casino registration of domestic-invested PFM, m88 casino Illustrative Guidance, based on m88 casino special characteristics of WFOE PFM, adds additional requirements and makes certain adjustments to m88 casino Guide on Legal Opinions for Registration of Private Fund Managers applicable to domestic-invested PFM.

A.Establishment of m88 casino Entity

Same as m88 casino requirement for domestic-invested PFM, m88 casino Illustrative Guidance requires a WFOE PFM to obtain a corporate name and have a defined scope of business, which explicitly encompasses “investment management”, “asset management” and/or “fund management”. WFOE PFMs are required not to concurrently engage in any businesses that may have conflict of interest with m88 casinoir private fund management business, or any non-financial businesses. For foreign institutions engaging in m88 casino overseas investment fund management businesses in China, e.g., QDLP, m88 casino Illustrative Guidance emphasizes that such institutions’ overseas investment fund management businesses shall be properly segregated from om88 casinor private fund management businesses. This requirement set out in m88 casino Illustrative Guidance supports m88 casino view that m88 casino QDLP business is a type of private fund management business, and at m88 casino same time, clarifies that “proper segregation” of m88 casino two businesses aims to prevent conflict of interest. Our understanding is that, at m88 casino least, m88 casino Illustrative Guidance does not expressly prohibit a WFOE PFM from engaging in QDLP business and private fund management business at m88 casino same time.

B.Foreign Shareholder and Foreign De Facto Controller

m88 casino Q&A Regarding Registration and Filing of Private Funds (X) (“AMAC Q&A (X)”) provides that both m88 casino foreign shareholder and m88 casino foreign de facto controller of a WFOE PFM shall be overseas licensed financial institutions. With regard to how to identify m88 casino foreign de facto controller of a WFOE PFM, m88 casino de facto controller shall be traced to m88 casino ultimate individual or overseas institution regulated by overseas financial regulators. If, when tracing m88 casino de facto controller, m88 casino shareholding ownership appears to be dispersed, e.g. m88 casino de facto controller is traced to be an overseas listed company with a relatively dispersed shareholding structure, m88 casino WFOE applicant may be deemed as having no de facto controller. Our suggestion to this point is that, in case that an applicant has a foreign de facto controller while such de facto controller is not a licensed financial institution, m88 casino WFOE applicant shall truthfully disclose such information in its application so that m88 casino relevant Chinese regulators can exercise m88 casinoir discretion to decide whem88 casinor to allow an exception.

C.Independent Investment Decision Making

According to m88 casino AMAC Q&A (X), when a WFOE PFM trades securities or futures in China, its investment decisions shall be made independently, and trading orders shall not be delivered by an institution or system located outside of China. As for such widely concerned requirement on independent investment decision making, m88 casino Illustrative Guidance furm88 casinor clarifies that WFOE PFMs shall locate m88 casinoir system terminals within m88 casino territory of China; all trading paths shall be transparent and traceable; all trading data shall be complete and available for inspection; all trading procedures shall be clear and controllable; and all trading records are to be kept in entirety during m88 casino whole process. WFOE PFMs shall also appoint persons-in-charge for both m88 casino investment decision making and m88 casino trade execution. We feel that m88 casino aforementioned detailed requirements have already considered m88 casino need for m88 casino WFOE PFMs to leverage m88 casinoir global investment and research resources, infrastructure and risk control system of m88 casinoir overseas groups.

D.Fund-related Business Practitioners and Concurrent Positions of Senior Executives

m88 casino Illustrative Guidance requires fund-related business practitioners of a WFOE PFM to obtain m88 casino qualifications for practicing fund-related business. m88 casino fund-related business practitioners shall include not only senior executives of m88 casino WFOE PFM, but also investment managers, persons-in-charge for investment decision making or trade execution, and om88 casinor practitioners engaging in m88 casino daily private fund operation and management.

In addition to m88 casino requirements for senior executives as set out in m88 casino Guide on Legal Opinions for Registration of Private Fund Managers, m88 casino Illustrative Guidance clearly requires that senior executives of a WFOE PFM shall enter into employment contracts with m88 casino entity he/she serves, and undertake to contribute appropriate working time to this WFOE PFM when he/she takes any concurrent position in om88 casinor affiliates of this entity. m88 casino Illustrative Guidance does not prohibit senior executives from taking concurrent positions in an affiliate of a WFOE PFM, but requires m88 casino WFOE PFM to formulate relevant internal rules and take relevant measures to avoid any potential conflict of interest arising from senior executives taking concurrent positions.

E.Disclosure of Relevant Information of Affiliates, Foreign Shareholders, and Foreign De Facto Controllers

m88 casino Illustrative Guidance only requires WFOE PFMs to disclose m88 casinoir subsidiaries, branch offices, and om88 casinor affiliates within China, or any overseas affiliates having a potential material impact on m88 casino onshore fund management business of such WFOE PFM. When compared to domestic-invested PFMs, a WFOE PFM shall disclose whem88 casinor its foreign shareholder or de facto controller is subject to any material punishments or any litigation or arbitration procedures within m88 casino latest three years, and whem88 casinor a senior executive of m88 casino foreign shareholder or m88 casino foreign de facto controller is subject to any disciplinary punishment or has any adverse credit record, in addition to m88 casino disclosure of any punishment on m88 casino WFOE PFM itself.