The State Council General Office issued guidance requiring provincial-level and
directly administered municipal governments where private fund managers are
registered to lead risk resolution, coordinating with the State Council
securities regulator and other agencies. Local authorities must swiftly
inventory exposures and adopt market-based, rule-of-law risk-resolution plans
covering asset recovery, asset verification and distributions/returns, and avoid
creating expectations of public-resource support. Risk handling should be
conducted within local mechanisms with active cooperation from the securities
regulator and its local offices, including enforcement and penalties. Where one
ultimate controller oversees multiple private fund managers across regions, lead
responsibility will, in principle, follow: headquarters registration location,
core enterprise corporate income tax payment location, then senior management
personal income tax payment location. The guidance explicitly forbids using
private funds to improperly incur debt to resolve liabilities or to dispose of
troubled companies, to prevent new risk points.
