Commercial and financial district in Shanghai, China Photo: iStock

Sales institutions should sell different levels of private equity products to investors according to the level of risks they can bear, Caixin reported, citing a State Council draft. The institutions should also report the leverage of private equity funds to industry associations, it said.

The draft regulations contain a total of 11 chapters and 58 items, mainly highlighting risk prevention and investor rights.

It also lists duties of fund managers and fund sales institutions in fundraising and investment operations.

In recent years, China’s private equity fund industry has developed rapidly, and thus “is necessary to develop standardized operations and special administrative regulations” in order to protect the rights and interests of investors, it said.