Considerations On Measures Dealing With Disputes Of Commissioned Financing Contract In Securities Market

As a form of asset management, commissioned financing is, in a way, similar to but in essence different from systems stipulated in existing laws and regulations, such as delegation, agent, trust, brokerage and it should be deemed as a unique legal relationship. When adjudicating a commissioned financing contract as legally invalid, People's Court needs to be cautious and differs the decision upon circumstances. Unless forbidden by laws, regulations and national financial policies, a commissioned financing contract may generally be regarded as valid, while minimum profit guarantee articles agreed by parties should be judged as void. With a valid commissioned financing contract, if the commission agent properly and appropriately honors the obligations provided in the contract, he need not take responsibility for capital loss incurred to clients, however, he should be paid as agreed upon. While a commissioned financing contract is invalid, both client and commission agent should be imputable to capital loss and divide responsibility according to their respective negligence. To stimulate the soundness, prosperity and development of commissioned financing in securities market, legal measures on commissioned financing should be streamlined, while administration on commissioned financing and judicial decicision methods must be strengthened.