What are the characteristics of private equity fund custody and outsourcing business?

Custody outsourcing refers to a package of services provided by securities companies to professional institutional investors such as private equity funds and hedge funds and high-net-worth individual customers, including product design, asset custody, operation outsourcing, sales management, investment transactions, leverage allocation, research information and liquidity support.

The purpose is to help fund managers get rid of administrative affairs and fund raising, so that they can have more time and energy to focus on trading strategies.

Article 10 1 of the Fund Law stipulates: "A fund manager may entrust a fund service agency to handle matters such as fund share registration, accounting, valuation and investment consultancy on his behalf, and a fund custodian may entrust a fund service agency to handle matters such as fund accounting, valuation and review on his behalf, but the responsibilities that the fund manager and the fund custodian should bear according to law are not exempted by entrustment".

The "accounting, valuation, review and other matters" in the outsourcing business of the fund custodian here refer to the matters in its statutory duties as stipulated in Article 36 of the Fund Law.

Legal responsibility of fund custodian

According to Article 36 of the Fund Law, the statutory duties of the fund custodian include:

(1) Safely keep the fund property;

(2) Opening a fund account and a securities account of the fund property in accordance with regulations;

(3) Set up separate accounts for different fund assets under custody to ensure the integrity and independence of the fund assets;

(4) Keeping records, account books, statements and other relevant materials of fund custody business activities;

(5) Handling liquidation and settlement in a timely manner in accordance with the provisions of the fund contract and the investment instructions of the fund manager;

Reference: Private Equity Fund Management Regulations Baidu Encyclopedia