Regulators recently opened public consultation for the "Private Fund Raising Supervision and Management Measures (Draft for Comments)", a new set of rules that systematically reorganizes investor qualification benchmarks, institutional responsibilities, suitability evaluation, dedicated settlement accounts, and follow-up confirmation. The market is particularly paying attention to the significant shift in the qualified investor threshold—expanding from individual assessment to a broader family-based evaluation—along with clearer rules for "specially qualified investors" and more detailed look-through requirements. As brokerages serve as a primary sales channel for these private fund products, they are notably sensitive to these upcoming changes.
To gauge the real-world impact, our reporters spoke to wealth management professionals across several brokerages to surface the practical problems and expectations as they implement these proposals.
Where things stand
The most immediate shift felt by frontline staff in brokerage wealth management departments is the change in how individual qualified investors are assessed. Under the draft, the definition of a qualified individual investor now hinges on family rather than personal financial metrics. The transition is significant because the older rules required individuals to either have two years of investment experience in securities, funds, futures, or equity, or hold a senior management position in a relevant institution—and also meet one of three financial bars: family financial assets of at least RMB 5 million, net family financial assets of at least RMB 3 million, or an average annual personal income of over RMB 500,000 in the last three years, plus a fund subscription of no less than RMB 1 million per single product with an equal initial paid-in amount. The draft now requires investors to demonstrate these qualifications on a family level, not just in their own name.
To execute this in practice, one wealth manager pointed out that if a single individual holds over RMB 5 million in personal financial assets, the family total naturally exceeds that threshold, so there is no need for the brokerage to scrutinize every family member's assets and liabilities. Another professional from a Shanghai-based brokerage added that when relying on net family financial assets to qualify, a broker first has to confirm family relationships via hukou books or marriage certificates, and then request credit reports for all members to calculate net worth using the formula: total assets minus total liabilities. The tricky part is verifying assets and liabilities for every family member at a single, synchronized point in time.
When there is any reasonable doubt that an investor's balance is not their own, the professionals suggest requiring original bank statements or transaction flows to back up the claim. One senior figure from a mid-sized brokerage believes the new standards force more precision in checking assets and investment history. While brokers have already built systems for marketing management, dual recording, risk warnings, cooling-off periods, and follow-up interviews, they will now need to quickly adapt their internal controls to meet these stricter rules.
Why just 10 ASX 200 shares?
Beyond individual thresholds, the draft also tightens how "specially qualified investors" are recognized and vetted. The rules now clearly classify institutions regulated by the State Council's financial regulators, asset management products they issue, private fund managers registered with AMAC, private funds filed with AMAC, social security funds, basic pension funds, annuity funds, other charitable funds, and both QFII and RQFII as qualified investors. One wealth management insider at a securities firm noted that these licensed institutions and private fund managers are considered "natural" or "specially qualified" investors, meaning they don't need to provide financial statements like regular investors. But whether they still need to undergo risk assessments or receive risk disclosures as professional investors is something the rules have not fully clarified yet.
There are additional gray areas. A professional from another brokerage highlighted the treatment of trust products. Under the Trust Classification Measures, family trusts, personal wealth management trusts, and corporate wealth management trusts are considered asset service trusts and are not subject to the "Guiding Opinions on Regulating Asset Management Business of Financial Institutions" (i.e., the new asset management regulation). So, it remains unclear whether these non-asset-management trust products should directly count as qualified investors or if they need to go through a look-through review under Article 11 of the proposed rules. When dealing with asset management products as investors, another concern emerges: what operational steps fully satisfy the obligation to look through and identify nominee holdings or the source of funds? Several brokerage asset management executives said this issue requires further specification. For now, some licensed institutions require the top-tier product manager to provide detailed investor lists and source of funding information to meet the requirement.
There are also transitional issues. Current investors who want to add to their positions after the new rules take effect—should they be re-certified as qualified investors and undergo fresh risk assessments? Several brokerage wealth managers agree that, in practice, any new subscription or top-up would trigger a new qualification check and risk evaluation process. On the settlement side, the dedicated settlement account name must now reflect the private fund name and its purpose, usually in the "Product Name + Special Fundraising Account" format. The old style, which used the fundraising institution's name plus "special account," no longer complies with the rules. However, it is still ambiguous whether accounts opened by third-party distributors or outsourcing institutions must be renamed to include the product name in all cases.
Key considerations
The draft also introduces a mandatory investment knowledge test, but there is no standard template or official guidance yet on how to administer or score this test. The industry is waiting for further clarification on where the benchmarks lie.
As these rules move toward finalization, brokerages are anticipated to need to rapidly upscale their compliance systems to manage the increased breadth and depth of client due diligence, especially regarding family-level verification, asset traceability, and the new knowledge test requirements.