The Protection Of Beneficiary's Rights And Interests

Affiliated transaction has always been an outstanding and controversial problem in domestic trust industry. The 2004 annual reports by trust companies reveal that this phenomenon, especially affiliated transaction with trust property (AT with TP), is prominent. The fair AT with TP exerts its positive effects by providing trust companies with a lot of business opportunities and offering investors a guarantee. However, the unfair AT with TP will harm the rights and interests of beneficiary and hinder the development of the whole trust industry.What AT with TP affects most is beneficiary's rights and interests. Therefore, there is necessity to regulate AT with TP rationally in order to furthest reduce the negative impact, ensure its justness and provide more protection for the beneficiary. Compared with the affiliated transaction of trust company with its own property, AT with TP differs greatly in form, decision-making mechanism, information disclosure, affected subject and relief measures. This thesis makes an institutional research on the protection of beneficiary's rights and interests, using comparative analysis. It is composed of three chapters, totaling about 45,000 words.The first chapter focuses on the concept of AT with TP, on which the regulation must be based. After introducing the characteristics of trust company, the author defines the connected party in AT with TP and lists five forms of AT with TP. By a comparison between the affiliated transaction of trust company with its own property and AT with TP, the last part of this chapter clarifies the research scope of this study—AT with TP.The second chapter analyzes the necessity of legal regulation of AT with TP. Through the introduction of the present status of AT with TP in China and the analysis of advantages and disadvantages of AT with TP, the author points out the necessity of legal regulation and its theoretical origin, that is, the duty of loyalty.The last chapter, the most important part of the whole thesis, carries out a research on relevant lawmaking and institutions. It begins with a brief analysis of the principle and mode of lawmaking. Then the author explores a way to improve decision-making mechanism, mainly by pre-agreement of trustor and agreement of beneficiary. Thirdly, the author analyzes the information disclosure of AT with TP, and puts forward some suggestions for improvement. The concluding part discusses relief measures of beneficiary in unfair AT with TP and indicates the importance of establishing relief measures. It ends up with an analysis of beneficiary's rights and interests concerning three aspects—trust company, relevant responsible persons and the correspondent party of afflicted transaction.