On September 30, 2025, the Supreme People's Court released the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (Draft for Comments)" (hereinafter referred to as the "Judicial Interpretation Draft of the Company Law") for public consultation. The Draft Judicial Interpretation of the Company Law consists of eight chapters and ninety articles, including general provisions (11 articles), shareholder contributions and responsibilities related to contributions (19 articles), equity proxy and investor rights protection (9 articles), equity transfer and pre emptive rights (9 articles), corporate governance (11 articles), company dissolution and liquidation (18 articles), special provisions for listed companies (10 articles), and supplementary provisions (3 articles).

It is worth noting for practitioners in the private equity investment fund industry that this draft of the Judicial Interpretation of the Company Law has added provisions regarding the effectiveness and performance of valuation adjustment agreements (Article 37 [1]) and the determination of the nature of investors' requests for shareholders to repurchase equity (Article 38 [2]).

(1) Article 37 has absorbed the relevant content of the "Minutes of the National Conference on Civil and Commercial Trial Work of Courts" regarding the effectiveness and performance of the "betting agreement", and explicitly prohibits investors from forcing the company to actually assume the betting obligation by agreeing with the company on breach of contract liability and providing collateral, without fulfilling the capital reduction procedure or distributing profits in accordance with the law.

(2) Article 38 provides specific provisions on the rules for investors to request shareholders to repurchase their shares according to the agreement after acquiring the equity: the company shall act as a third party in the repurchase lawsuit and its corresponding registration obligations for changes; If the assets of shareholders are insufficient to pay for the repurchase, investors have the right to apply for auction or sale of equity and receive compensation from the proceeds; Before shareholders fulfill their repurchase obligations, they still need to bear the responsibility for not fully fulfilling their capital contribution obligations; In terms of exercise period, for the exercise period of selective repurchase, the previous Q&A opinion on the exercise period not exceeding 6 months in the absence of an agreement was not extended. Instead, the company's shareholders were given the right to urge, stipulating that investors should make a choice within a reasonable period after being urged by shareholders. Otherwise, their requests for equity repurchase rights will not be supported, except with the consent of shareholders; For agreements that require shareholders to repurchase their shares by the deadline, otherwise the equity will belong to the investor or the investor will repay the repurchase amount with the proceeds from the discount, auction, or sale of the equity, they shall be handled in accordance with the rules of equity transfer guarantee, except for the actual exercise of shareholder rights by the investor.

On September 25, 2025, the General Office of the Shanghai Municipal People's Government issued the "Shanghai Municipal Government Investment Fund Management Measures (Trial)" (hereinafter referred to as the "Measures"). The Measures consist of seven chapters and forty-four articles, including the establishment, management, exit, budget management, performance supervision, and risk prevention of government investment funds. In terms of fund establishment, the Measures stipulate the overall layout and hierarchical management of government investment funds, pre establishment evaluation and scheme refinement, as well as the establishment time, duration, and filing requirements; In terms of fund management, the Measures stipulate the organizational structure and nested hierarchical control of government investment funds, relevant requirements for fund managers, and considerations for adjusting management fees; In terms of fund exit, the Measures stipulate that fund managers should establish a fund exit management system and formulate exit plans, and clarify that government investment funds generally do not have revolving investments; In terms of budget management, the processes of budget preparation, approval, and disbursement for government investment funds have been clarified; In terms of monitoring performance and risk prevention and control, the "Measures" clearly stipulate the implementation of full process performance management for government investment funds, stipulate that the state-owned assets department shall take the lead in formulating the relevant system of due diligence exemption for government investment funds, do not use single projects or annual profits and losses as the basis for accountability, and strictly prohibit disguised borrowing in the name of government investment funds.

On September 30, 2025, the association released the third and fourth issues of private fund registration and filing dynamics, respectively summarizing the professional experience recognition of the controlling shareholder and actual controller of the manager, as well as typical problems such as the manager's disguised channel business, the manager's need for sustained business development ability, investors' lack of capital contribution ability, the manager's violation of serving as a limited partner or the fund's violation of serving as a general partner, forming cases and supporting analysis explanations:

(1) In the third dynamic case, the controlling shareholder A company (established in 2023) of the applying institution A was established by a certain group to implement the strategic deployment of promoting industrial development through funds. It collected all the equity of asset management and investment companies within the group, and undertook the responsibilities of strategic emerging industry investment layout around the group's main business; The actual controller of Company B (established in 2022) has inherited the assets, business, and personnel of Company C and Company D. The actual controller of Company C (established in 2024) has inherited the financial investment and related personnel of its own large industrial group. The relevant business lines and personnel have many years of experience in operation, management, or asset management, investment, and related industries. The association has approved the registration of managers for companies A, B, and C.

According to the Regulations on the Registration and Filing of Private Investment Funds, the controlling shareholder, actual controller, and general partner of a private fund manager must have at least 5 years of relevant experience in operating, managing, or engaging in asset management, investment, related industries, etc. The association has refined the applicable standards for the aforementioned regulations: firstly, for enterprises controlled by the government and its authorized institutions that serve as controlling shareholders, actual controllers, and general partners of private fund managers and are established to undertake major national or regional strategic functions, the association, in the spirit of serving the implementation of national strategies and promoting industry development, recognizes their relevant experience after providing relevant approval documents or proof materials. Secondly, for enterprises controlled by the government and its authorized institutions that serve as controlling shareholders, actual controllers, and general partners of private fund managers, as well as large private enterprises that are subject to mergers, divisions, restructuring, etc., the association shall, in accordance with the relevant provisions of the Company Law of the People's Republic of China and the principle of substance over form, recognize their relevant experience after providing relevant approval documents or proof materials. For controlling shareholders, actual controllers, and general partners of private fund managers who have been established for less than 5 years due to undertaking major national or regional strategic functions, or due to mergers, divisions, restructuring, etc., the association will retrospectively recognize relevant experience based on their actual management experience, undertaking strategic functions, etc., in accordance with the principle of substance over form.

(2) In the fourth round of dynamic cases, regarding the issue of managers engaging in channel business in a disguised manner, the responsibilities of the manager and executive partner of the fund to be filed in case one are unclear and the fee collection is unreasonable. Although the manager of the fund to be filed in case two is the largest shareholder of the executive partner, their shareholding ratio is not more than 50%, and they do not enjoy absolute control, resulting in a weak control relationship. Therefore, the association has returned the fund filing applications related to the two aforementioned cases. ② Regarding the issue of the need for managers to have the ability to continue operating, Manager A and Manager B of the two funds proposed for filing in Case Three announced by the association are both institutions that have been registered earlier, have a smaller scale of management, and have not been operating for a long time. To verify whether the managers continue to meet the registration requirements, the association requires them to provide all employee resumes, labor contracts, social security payment records and salary statements in the past six months, company account bank statements in the past year, and other materials. After investigation, Manager A has not paid social security to the employees, and has less than 5 full-time employees who do not have the ability to sustain their business. The association requires them to rectify within a specified period of time, and subsequently handle fund filing based on the rectification situation. Manager B has a good financial condition, with no less than 5 full-time employees, meeting the basic business requirements. They plan to file for private fund registration and have fully paid in the funds. The first proposed bidder has been identified, and there is a genuine need for business expansion. The association has processed the application for private fund registration normally. ③ Regarding the issue of investors not having the ability to contribute capital, in case four of a proposed filing fund by the association, investor B and investor C companies have a mismatch between their actual capital contribution ability and subscribed capital scale. Investor B company is reflected as an institutional investor with insufficient capital contribution ability and relies on its shareholders for capital injection. However, based on the principle of legal person property independence, shareholders have already paid up the registered capital in full and have no legal obligation to contribute to its investment fund; Investor C's company is reflected in the insufficient investment ability of institutional investors themselves, who use contingent income instead of realized income or immediately realizable assets as proof of investment ability, and cannot be recognized as having subsequent investment ability. The association shall return the filing application of the fund in accordance with relevant regulations and require the fund manager to continue to provide additional proof of investors' ability to contribute. If unable to provide such proof, the manager shall rectify the situation, determine a reasonable size of the private fund, and submit the filing application only after the investors have sufficient ability to contribute. ④ Regarding the issue of managers acting as limited partners or private equity funds acting as general partners in violation of regulations, in Case 5 announced by the association, the general partner of the proposed filing fund is another private equity fund managed by Manager D, and one of the limited partners is Manager D. This does not comply with the requirements of private equity fund managers not to directly or indirectly use private equity fund assets for investment with unlimited liability, as well as the requirements of private equity fund managers to establish partnership type private equity funds and serve as executive partners. The association has returned the fund filing application and requested the manager to adjust the fund structure.

On September 8, 2025, the State Council issued the "Reply on the Pilot Implementation Plan for Comprehensive Reform of Market oriented Allocation of Factors in Some Regions of China" (hereinafter referred to as the "Reply"). The "Reply" mentions supporting the construction of a comprehensive cultivation platform for planned listed enterprises in regional equity markets, cautiously exploring the transfer of private equity and venture capital shares, and strengthening cooperation and connection with the national small and medium-sized enterprise share transfer system.

On September 18, 2025, the State Council Information Office held a series of themed press conferences on "Completing the 14th Five Year Plan with High Quality". Vice Minister of Science and Technology Qiu Yong introduced the relevant work of the Ministry of Science and Technology, mentioning the acceleration of the establishment of the National Entrepreneurship Investment Guidance Fund, which is expected to drive nearly 1 trillion yuan of local and social capital; Accelerated the deployment of a batch of financial asset investment company (AIC) funds, with a contracted amount exceeding 380 billion yuan; Jointly with the Social Security Foundation, large banks, and local governments, we will promote the establishment of technology industry integration funds, science and technology innovation collaborative parent funds, venture capital secondary market funds, etc., with a scale of over 350 billion yuan, to "attract" and "unblock" venture capital.

Zhao Shanzhong, Director of the Institutional Department of the China Securities Regulatory Commission, stated at the 2025 annual meeting of the Asset Management Special Committee of the Financial Street Cooperation and Development Council that private equity venture capital funds are one of the key driving forces for technological innovation. By providing key funds to support the formation of innovative capital, promoting the integration of industrial chain resources through mergers and acquisitions, and empowering enterprise growth through professional post investment management. In recent years, the China Securities Regulatory Commission has continued to deepen reforms, actively promoted the optimization of the ecology of the equity venture capital industry, worked hard to smooth the entire chain mechanism of fundraising, investment management, and withdrawal, and better played the important role of private equity venture capital funds in supporting technological innovation.

On September 15, 2025, the Guangdong Branch of the State Administration of Foreign Exchange issued the "Implementation Rules for the Pilot Business of Qualified Foreign Limited Partners (QFLP) Foreign Exchange Management in Hengqin Guangdong Macao Deep Cooperation Zone" (hereinafter referred to as the "Rules"). The "Detailed Rules" mainly include five aspects: foreign exchange registration, fund exchange, information reporting, and supervision and management. It is applicable to domestic enterprises recognized by local financial management departments to legally establish private investment funds in the Hengqin Guangdong Macao Deep Cooperation Zone that can raise funds from domestic and overseas investors in a non-public manner, and entrusted to manage the relevant foreign exchange management content involved in the pilot fund investment business. It specifically stipulates the foreign exchange registration procedures, QFLP pilot scale balance management, fund exchange, international balance of payments statistics declaration, etc. of management enterprises after obtaining the pilot qualification and the approved scale of overseas funds that can be raised. The detailed rules will be implemented from October 16, 2025.

On September 25, 2025, the association announced that a joint working meeting between the Long Term Fund Committee and the Equity Investment Private Equity Fund Committee had been held. During the group discussion session of the Long term Fund Committee, attending members and representatives believed that long-term funds represented by social security, insurance, banks, etc. have the characteristics of long investment periods and strong risk tolerance, which naturally complement the specialized operation and management of private equity and venture capital funds; Under the downward trend of long-term interest rates, the willingness of long-term funds to expand equity investments and increase investment returns has significantly increased, and the prospects for deep cooperation with private equity venture capital funds are broad. The attending committee members and representatives suggested actively optimizing relevant policies and unblocking checkpoints and obstacles in the key areas and difficulties of cooperation between long-term funds and private equity funds.

During the group discussion session of the parent fund committee, some members and representatives reflected that the development of government funds and market-oriented parent funds are facing new situations and challenges. There are still shortcomings and weaknesses in the function of "central local" funds, manifested in the lack of patient capital, structural imbalance of LP, further strengthening of "early investment and small investment technology", insufficient diversification of exit channels, and the need to improve tax mechanisms. These problems still exist for a long time and require sustained support policies from the state, relevant ministries, and localities to promote implementation and effectiveness. The attending committee members and representatives unanimously stated that related fields such as technology transfer, optimization of production factors, and expansion of overseas markets, as well as early investment in "early investment, small investment, hard investment" and mid to late stage investment in "strengthening chain, supplementing chain, and extending chain", will become the key focus of equity venture capital funds.