China’s new asset management trust measures

1. Introduction

On 30 October 2026, the National Financial Regulatory Administration (“NFRA”) published the final version of the Measures for the Administration of Asset Management Trusts (《资产管理信托管理办法》) (“Measures”), following the release of the consultation draft on 31 October 2025. The Measures will take effect on 1 January 2027.

The Measures introduce a comprehensive regulatory framework governing the establishment, offering, investment management and ongoing operation of asset management trust products.

The Measures may have a significant impact on certain fundraising and investment structures commonly adopted by private securities investment fund managers (“PFMs”) and Qualified Domestic Limited Partnership (“QDLP”) fund managers. In particular, trust products have frequently been used as feeder/wrapper vehicles for investments into PFM/QDLP funds through trust-of-funds structures, a model that will now be subject to heightened regulatory scrutiny and a more prescriptive compliance framework.

This article summarises the key implications of the Measures for PFMs and QDLP managers, with a particular focus on the investment concentration limit, the qualification requirements for investment cooperation institutions, restrictions on multi-layer investment structures and investments in non-standard assets, as well as the available transitional arrangements.

More broadly, the Measures are intended to close regulatory gaps between trust companies and other financial institutions and reduce opportunities for regulatory arbitrage. As a result, many PFMs and QDLP managers may need to reassess their existing capital-raising arrangements and consider alternative fundraising solutions, including partnering with more diversified trust-of-funds platforms, engaging distributors directly rather than through trust-product channels, and restructuring existing fund platforms to achieve greater flexibility in the deployment of QDLP quota across multiple funds that are in existence and duly filed.

2. Key Regulatory Implications

2.1. 25% Investment Concentration Limit for Investments in a Single Asset Management Product

Article 48 of the Measures provides that the amount invested by a single trust product in any single asset management product must not exceed 25% of the net assets of the relevant trust product.

Importantly, Article 82 of the Measures clarifies that an asset management product refers to an asset management product as defined under the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (《关于规范金融机构资产管理业务的指导意见》), and that private investment funds are subject to the relevant provisions of the Measures applicable to asset management products.

Accordingly, a PFM/QDLP fund would fall within the scope of an asset management product for the purposes of the Measures. As a result, where a trust plan invests all or substantially all of its assets in a single PFM/QDLP fund, such investment would, in principle, result in a breach of the 25% investment concentration limit under Article 48.

Potential Exemptions

Article 48 provides that the 25% investment concentration limit does not apply to a trust product that meets any of the following criteria:

• Closed-ended trust products that invest exclusively in eligible listed or private equity investments, where all investors are qualified institutional investors, each investing at least RMB 3 million.
• Trust products whose investors are all qualified institutional investors each investing at least RMB 10 million.
• Closed-ended trust products with less than 12 months remaining, following the maturity, disposal or exit of underlying non-standard assets.
• Index-tracking trust products that invest strictly in accordance with a qualifying index.

Practical Implications for PFMs and QDLP Managers

The relevant exemption criteria set relatively high thresholds and are unlikely to be met by most trust-of-funds structures in practice. The second exemption may be most relevant where all trust plan investors are qualified institutional investors with subscriptions of at least RMB10 million (or its foreign currency equivalent).

PFMs and QDLP managers should therefore assess whether their trust plans investors could benefit from an Article 48 exemption. Otherwise, the trust plan may need to cap its investment in the relevant PFM/QDLP fund at 25% of its net assets, potentially requiring changes to existing fundraising structures.

2.2. Qualification Requirements for PFMs and QDLP Managers Acting as Investment Cooperation Institutions

Article 54 of the Measures expressly includes the issuer of an asset management product in which a trust product invests, as well as an investment adviser participating in the investment management of the trust product, within the scope of investment cooperation institutions.

Accordingly, where a trust plan invests in a PFM/QDLP fund, the manager of the PFM/QDLP fund may be regarded as an investment cooperation institution for the trust plan and will be subject to the relevant qualification requirements.

In particular, a PFM/QDLP manager acting as an investment cooperation institution must:

• have been registered with the Asset Management Association of China (the “AMAC”) for at least one year;
• have no record of material violations of laws or regulations;
• have a continuous and traceable investment management track record of at least three years; and
• have at least three investment management personnel with no adverse professional records.

The Measures also require trust companies to establish a selection mechanism for investment cooperation institutions and to conduct due diligence on their management teams, professional records and historical performance.

Practical Implications for PFMs and QDLP Managers

It is worth noting that these requirements appear to be less onerous than AMAC's "3+3+1" criteria for qualified investment advisers, as they focus on the manager's institutional investment track record rather than the experience of individual portfolio managers.

Nevertheless, the requirements may still present practical challenges for a number of PFMs and QDLP managers, which often operate with relatively lean investment teams. Both PFMs and QDLP managers should therefore assess whether their current investment teams satisfy these requirements and whether additional hiring may be necessary.

2.3. Restrictions on Multi-layer Investment Structures

Article 47 of the Measures provides that a trust product may invest in one layer of another asset management product, but the asset management product in which it invests must not further invest in another asset management product, other than a public securities investment fund. Similarly, where another asset management product invests in a trust product, that trust product may not further invest in any other asset management product, except for a public securities investment fund.

As discussed above, Article 82 expressly provides that private funds are subject to the relevant provisions of the Measures applicable to asset management products. Accordingly, the QDLP fund in which a trust plan invests would constitute an asset management product for the purposes of Article 47.

Practical Implications for PFMs and QDLP Managers

Under the typical QDLP structure, the trust plan invests in the QDLP fund, which in turn invests in an offshore master fund. The investment by the trust plan in the QDLP fund would constitute one layer of investment in an asset management product under Article 47 and QDLP fund’s investment into an overseas master fund may constitute an additional layer of investment. A different analysis may apply where the QDLP fund invests primarily in retail funds, such as UCITS funds.

Based on our understanding of the regulatory approach generally taken in practice to date, investments by a QDLP fund in offshore master funds have not typically been treated as additional investment layers under PRC asset management regulations. However, the Measures do not expressly address this point, and it remains unclear whether regulators may adopt a different interpretation or supervisory approach going forward.

2.4. Requirements for Investments in Non-standard Assets

Article 46 of the Measures provides that a trust product directly or indirectly investing in non-standard assets must be a closed-ended trust product, and the maturity or exit date of the relevant non-standard assets must not be later than the termination date of the trust product.

Where a trust product invests in non-standard assets indirectly through another asset management product, the asset management product in which it invests must also be closed-ended, and its termination date must not be later than that of the trust product. The trust company is also required to look through the relevant asset management product to identify the underlying non-standard assets and disclose the relevant information to investors.

Article 82 defines non-standard assets to include non-standard debt assets, unlisted equity interests and beneficiary rights (受益权).

Practical Implications for PFMs and QDLP Managers

The restrictions on investments in non-standard assets may create challenges for QDLP structures investing in private credit, private equity and other alternative assets. Trust companies may be required to conduct a look-through review of the underlying portfolio and verify compliance with the relevant closed-end and maturity-matching requirements, increasing due diligence and structuring complexity.

In addition, where a trust plan serves as a feeder into a QDLP fund that ultimately invests in non-standard assets, both the trust plan and the relevant QDLP fund may need to be structured as closed-ended products. This may create significant practical challenges for QDLP managers. Closed-ended funds are generally less commercially attractive to investors, offer limited flexibility for subsequent subscriptions, and may result in less efficient utilisation of QDLP quota, particularly where managers would otherwise seek to raise capital progressively through multiple closings.

2.5. Transitional Arrangements for Existing Trust Plans and PFM/QDLP Funds

The Measures will take effect on 1 January 2027. Article 85 distinguishes between new business and existing business:

• New business: From 1 January 2027, any new business undertaken by trust companies must comply with the Measures.
• Existing business: For existing business that does not comply with the Measures, trust companies are required to formulate rectification plans, identify and lock in the relevant trust products, and gradually reduce the scale of the non-compliant business.

Article 85 further specifies certain rectification arrangements for existing business:

• Non-compliance with the 25% investment concentration limit under Article 48: Trust companies may rectify the non-compliance by not making additional investments in the relevant asset or asset management product.
• Non-compliance with the requirements for investments in non-standard assets under Article 46: Trust companies may rectify the non-compliance by refraining from making additional investments in the relevant non-standard assets.
• Non-compliance with the investment cooperation institution requirements under Article 54: Trust companies may rectify the non-compliance by not increasing the investment scale of the relevant products.

Notably, the Measures do not currently prescribe any rectification measures for non-compliance with Article 47's restrictions on multi-layer investment structures.

Practical Implications for PFMs and QDLP Managers

The transitional arrangements are particularly important for PFMs and QDLP managers with existing trust plans investing in their PFM/QDLP funds.

PFMs and QDLP managers should therefore engage with their cooperating trust companies at an early stage to understand their proposed implementation and rectification arrangements, including whether existing investments can continue to be held, whether additional subscriptions or capital contributions will be permitted, and whether any restructuring or orderly exit arrangements may be required.

3. Conclusion

The Measures could significantly reshape the use of trust plans as fundraising vehicles for PFM/QDLP funds, particularly where a trust plan serves as the primary feeder into a single fund.

While the Measures provide certain exemptions and transitional arrangements, their application will depend on the specific facts of each structure. Further regulatory clarification would also be welcome, particularly on the treatment of QDLP managers, offshore investment structures and the application of the investment layering and concentration rules.

Should you have any questions or require further assistance regarding any of the above, please do not hesitate to contact Melody Yang and Sherry Si at YaoWang Law Offices (our strategic alliance firm in China Mainland).