Recently, the Shanghai Municipal State-owned Assets Supervision and Administration Commission and the Shanghai Municipal Financial Office jointly issued the "Pilot Measures for the Assessment and Due Diligence Exemption of Private Equity Investment Funds Supervised by the Municipal State-owned Assets Supervision and Administration Commission." This is the first provincial-level institutional document on the assessment and due diligence exemption of capital funds in the country. A close reading of the "Pilot Measures" reveals that this document aims to reduce the pressure on decision-makers of state-owned capital funds from being held accountable for project losses. It introduces an operable due diligence exemption mechanism that helps address the issues of funds being hesitant to invest or unwilling to invest. The "Pilot Measures" clearly state that single project losses or unmet targets will not be used as the basis for negative evaluations of the fund or fund managers. At the same time, cases where "the fund performs well or meets overall objectives without causing significant losses or serious adverse effects, but where a few projects face risks or losses" are identified as applicable situations for due diligence exemption. This emphasizes a comprehensive evaluation of state-owned capital funds and reasonably tolerates normal investment risks. (Shanghai Observer)