A Study Of The International Legal Remedy System For Stock Investment Fund Holders' Benefits

The fund involves four persons in relation to each other. But since it is often the case that the fund investor and the fund holder are the same, the fund actually involves three people, namely the fund administator, the fund custodian and the fund holder. A fund holder joins a legal fund relationship by purchasing a fund quota, thus enjoying rights and obligations stipulated by the law and contract provisions. A stock investment fund is where a fund administrator sees to the management of investments by the application of his professional knowledge. The reason why an investor would like to hand over funds to the administrator is that he trusts the fund administrator's capacity to create benefits. The fund holder participates in this legal relationship by purchasing a fund quota. It is the view of the author that the legal supervision and regulation of the fund administrator is essential to the protection and the legal remedy system for the fund holder.Based upon a study of the international legal remedy system regarding the protection of stock investment fund holders, this paper analyzes relevant situations in developed countries, such as the U.K., the U.S.A., and Japan; it compares and contrasts the validity and feasibility of laws regarding the protection of stock investment fund holders in China and other countries; it closely studies structural weaknesses of internal fund management; and it poses views as to how to choose the mode of legal remedy to stock investment fund holders.With the development of the financial market, the maturity of the fund market, the continual improvement of the rule of law, the betterment of fund companies and their respective legal environments, fund holders will play more important roles in fund management. Fund holders rights to benefits are also guranteed by such mechanisms as negotiation, mediation,arbitration and litigation; therefore, it is of paramount significance to improve these mechanisms, espeically, the civil litigation mechanism. In light of the theoretical need to set up corporate investment fund in the legal remedy system for stock investment fund holders, this paper argues for the participation of the Securities Supervison Commission in the fund holders' civil litigation mechanism, thus reforming the conventional administrative measures taken in checking fund administrators.