Special Accounts Under the Draft Private Fund Raising Measures: Procedural Violations Face Administrative Penalties for the First Time

2026.09.07 · Professional Articles · Private Funds

On 4 September 2026 the CSRC released the draft Measures for the Supervision and Administration of Private Fund Raising for public comment. This article compares the segregated fundraising account regime under the 2016 self-regulatory rules with the draft Measures, covering the scope of account functions, the supervision structure and — most importantly — the first introduction of administrative penalties for procedural violations.

On 4 September 2026, the China Securities Regulatory Commission (CSRC) published the draft Measures for the Supervision and Administration of Private Fund Raising (the “Draft Measures”) for public comment, with comments due by 4 October 2026. Once in force, the Draft Measures will replace the 2016 Measures for the Administration of Private Fund Raising (the “2016 Measures”), a self-regulatory rule issued by the Asset Management Association of China (AMAC). The regulation of private fund fundraising thus moves from an industry self-regulatory rule up to a departmental rule of the CSRC.

Key changes to the segregated fundraising account regime

1. Scope of account functions expanded from four to five categories. Under the Draft Measures, fund share transfer proceeds must for the first time pass through the segregated fundraising and settlement account. Combined with the new requirement that transferees of fund shares be qualified investors, this closes the long-standing supervisory gap in the transfer stage, which had been used to circumvent fund-flow supervision.

2. Account naming standard introduced. The account name must reflect the name of the specific private fund product and its character as a segregated fundraising and settlement account — so the account can be identified directly at the banking-account level. Managers that pool fundraising monies of several fund products into a single account will struggle to meet the naming and reconciliation requirements.

3. Stronger language on the independence of account assets. The boundary of asset independence is extended from the institution’s “own property” to its own property “and other property it manages or controls” — borrowing the legislative technique used for the independence of trust assets and providing a clearer normative basis for third-party objections against enforcement against segregated account monies.

4. Narrower scope of supervising institutions, and statutory reconciliation duties. Supervising institutions are limited to commercial banks and securities companies licensed to sell funds; China Securities Depository and Clearing Corporation Limited drops out, and the catch-all reference to “other institutions prescribed by AMAC” is deleted. Reconciliation, previously a matter of contract, becomes a statutory duty, and the duty of managers and distributors to provide true, accurate and complete materials and to cooperate is written into the rules.

5. First administrative penalties for procedural violations (the most important change). Under the 2016 Measures, breaches of the segregated account obligations carried only self-regulatory sanctions — no fine was available, the heaviest sanction being revocation of manager registration. Under the Draft Measures, failure to open and use the segregated account as required, or failure to supervise its assets and cooperate with the supervising institution, may result in a warning or public criticism plus a fine of up to RMB 100,000 (up to RMB 200,000 where financial safety is involved and harm results); misappropriation of account assets is dealt with under the Regulations on the Supervision and Administration of Private Investment Funds, with confiscation of illegal gains and fines of one to five times the illegal gains (or RMB 100,000 to RMB 1,000,000 where there are no gains or gains are under RMB 1,000,000). The constraints on segregated account obligations therefore move from self-regulatory sanctions to administrative enforcement, forming a full hierarchy of regulatory measures, administrative penalties, market bans and criminal referral.

6. Information-disclosure requirements adjusted. Disclosure of the segregated account and its supervising institution is no longer one of the mandatory items in promotional materials; that information is now carried by the supervision agreement and the fund contract. This is a change in disclosure logic rather than a reduction in transparency.

Practical note. Although the final text may still be adjusted, the direction — stricter regulation of the segregated account regime — is clear. Re-signing supervision agreements, changing account names and building reconciliation mechanisms all take time; managers and distributors are advised to run a self-check against Part III of the original article during the comment period to leave sufficient time for the transition.

原文为中文专业文章，由焦梁律师团队微信公众号「焦梁商事金融律师团队」发布。 The original article was published in Chinese by the Jiao Liang Commercial & Financial Lawyers Team WeChat account.

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