Research On The Governance Structure Of The Trust-type Investment Fund In Securities

Trust-type investment fund in securities is a typical system that separates ownership from managing rights, in which existing high risk of trustees' morality. For safeguarding funds' safe and sound operations and carrying out the funds' purpose to serve the investors, it is necessary to establish a reasonable governance structure so as to set up an effective mechanism of balance inside the fund. The essence of governance structure of fund is the mechanism of balance of power inside the fund, namely, the mechanism of setting up rights and obligations among the internal persons interested, such as, the investors of the fund (securities holders), custodian trustees and trustors, etc. In this paper, the author, basing on the current situations about Chinese trust-type funds, analyzes and approaches the establishment of a reasonable governance structure of trust-type funds by the way of positive and comparative research and so on.This paper consists of four parts .In part I ,by analyzing the substance and characteristics of trust-type fund. The author points out the necessity of establishing the governance structure of trust -type funds; besides, the author expresses the fundamental principles for the establishment in China. In part II, the author analyzes the basis of establishing governance structure of trust-type funds , which is the organizing structure of trust-type fund and thinks that these are a lot of defects in Chinese fund organizations; The current Chinese legislative model is not appropriate while private trust and common trust is the choice. In part in, the author studies the obligation-blinding mechanism to the trustees, which is the core of governance structure of fund, pointing out that one of the main reason for the serious abnormality of current funds is the lacking of duty performance of the trustees . though it is hand to set up an effective obligation-binding mechanism to the trustees under the Chinese current legal system , we can learn from Britain and the U·S·A. In part IV, the author studies the mechanism of balance inside the governance structure of funds, that is the supervision mechanism of trustors and the balance mechanism of fund-holders, then puts forward that strengthening the balance mechanism inside the funds is an important step to establish an effective governance structure of found; further more , to deal with the problems in the two mechanisms the author makes some suggestion about perfecting the mechanism of balance inside the fund in China.