Research On Relation Between Market Competition And Fund Governance

Since its inception in 1991, China's securities investment fund has only 15 years of history up till now. As funds'scale expand gradually, investors'decentralization are growing higher and higher, which greatly exacerbates the issue of information asymmetry between funds'stock holders and its supervisors. All of these elements mentioned above induces consign-proxy problems such as adverse selection and moral hazard. Consequently, the issue of how to reach maxim investment return given certain conditions has become the core of fund——governance mechanism. Competition in fund market is the most fundamental external factor which decides funds'governance level. It is also a necessary supplement to funds'internal governance mechanism, and directly influences funs'governance level through stockholder's"Voting By Hand"and"Voting By Feet mechanism".By referring to information asymmetry theory, property theory, hyper-property theory and literature on market competition and fund governance, this paper carries out a theoretical analysis on relation between market competition and fund governance. They are relations between market competition and fund governance in areas of fund market competition, fund supervisor market competition, fund manager market competition and fund agency organization competition, and it reviews the relation between market competition and fund governance from both positive and negative perspective. Afterwards, this paper analyzes and compares fund market competition, fund supervisor market competition fund manager market competition and fund agency organization competition between America and China, finally it brings up suggestions to perfect China's fund governance (from the perspective of market competition) .