Discussion Of The Legal System Of Collective Investment

With the stable development of China's economy, people's controllable income gradually increases. People are more and more concerning about how to add value to their own properties. In such circumstance, the financing business comes into being in our financial market. Different kinds of financial institute issues different financing products successively. Though the nature of such business is diverse, they have the same transaction structure which could be attributive to collective investment. In the transaction structure of the collective investment, relative to financial institute, the investors are in the passive and weak position, which is the reason the collective investment is being studied.In order to effectively protect the investors in the weak position, and balance the benefits between the investors and financial institute, it is necessary to clarify the legal basis of the protection of the collective investment investors. Firstly, as the collective investment has the basic character of trust, it belongs to the legal relation of trust. Therefore, trust system is the basic legal framework of the protection of collective investment. Secondly, collective investment market exists inherent defect. Healthy development of the collective investment market is quiet important to the stability of the financing and the society as well. However, the protection of the investors' benefits is the basis of the development of collective financing market. Thereby, it is necessary to make up for the market defect according to the Theory of Market Supervision to protect the investors' benefits and further maintain the healthy development of the collective financing market.It is not long for the development of domestic collective investment market. Due to the imperfectness of the outside supervision environment and market environment, and immatureness of the financial institute and investors, there are all kinds of problems. With respect to the basis of collective investment market, there are the problems that the collective investment business lacks clear definition of legal nature, uniform supervision criterion and fair competition environment. By analyzing these problems regarding collective investment market, it could be found that the investors are the ones finally affected by the negative impact to the market caused by these problems. Hereby, the investors' protection issues turn to be the key problem which needs to be solved immediately in the collective investment market. The typical ones mainly include imperfect information disclosure system, to-be-set up trust liability system and absence of investors' protection fund system.Since the collective investment market grows fast, it is rational to carry out relevant laws and regulations to insure its healthy development. Therefore, this article, from the point of protection of investors' benefits, raises several proposals to improve the laws and regulation regarding collective investment. Before improving those laws and regulations, the following elements should be considered in the first place. They are the protection of the investors' benefits as the ultimate goal, the supervision pattern of consolidation and separation as the thinking background, and the set-up of the collective investment legal system as the legal basis. According to the theory of market supervision, the collective investment should be supervised thoroughly. Beforehand rule includes improving market entrance system, setting up market credit system, and improving beforehand information disclosure system. Underway rule includes setting up underway information disclosure system, setting up trust liability system and improving custodian system. Afterward rule should focus on setting up perfect investors' protection fund system.