China's National Financial Regulatory Administration expands financial asset investment companies’ equity investment pilot to provinces and opens participation to more banks and insurers

China's National Financial Regulatory Administration issued a notice expanding and refining the pilot programme under which financial asset investment companies (FAICs) can conduct equity investments, aiming to strengthen support for technology innovation and private enterprises. The changes build on the September 2024 expansion of the pilot for FAICs established by five large commercial banks from Shanghai to 18 cities, which has now achieved signed coverage across all 18 cities with signed amounts exceeding CNY 350 billion. The notice broadens where FAIC-related private equity funds can invest by allowing funds issued by FAIC subsidiaries to make equity investments across the province in which a pilot city is located, rather than only within the pilot city. It also supports eligible commercial banks to initiate the establishment of FAICs, increasing the number of institutions able to participate in the pilot. In addition, insurance funds are permitted, subject to legal and compliance requirements, to invest in the FAIC-affiliated private equity funds, invest in bonds issued by FAICs, or take equity stakes in FAICs. The regulator will work with relevant departments to further improve the equity investment environment and will guide FAICs to完善 internal systems and processes, strengthen talent teams, adjust performance assessment frameworks and enhance risk controls.