A Research On The Legal Problem Of Private Placement Fund

Private placement fund refers to the kind of investment fund that is colleted from specific investors by means of non-public method. It can meet personalized investment demand of different investors on capital market, play a financial intermediation and stabilize the securities market. So it is an integral part of our capital market. But in China, private placement fund has no clear legal status. The law hasn't admitted it legitimacy, nor gave system supply. And the monitoring hasn't clear principles. Therefore, it is without delay to improve the legislation and establish regulatory principles of the private placement fund.Firstly, this article clearly the major issues and basic ideas in charter one.Secondly, this article expounded the history of the development process of China's private placement funds, revealed its close ties with the securities market and generalized it as "two categories and there organizations". That is to say, the private placement fund in china includes private securities fund and private equity fund. And they usually operate by the trust agreement, the limited partnership and the corporation. Relying on these standardized forms of organization, private placement fund is allowed to enter the capital market. But it is facing the problems as following: an unequivocal legal status, the homogenous regulation and the lack of system supply.Thirdly, the paper focuses on discussing legal status of private placement funds------making laws openly or legalization. Making laws openly means makingprivate placement fund laws into the open, and it requests setting private placement funds through the methods admitted by laws, becoming the subject of market that can be identified by investors. The limitations of making laws openly is that making laws openly is innovatively collective invest system adapting to hysteretic law system, and becomes methods of circumventing laws by some private placement funds .Although private placement funds can get the admission temporarily, they become capital market potential safety hazards because of lacking of constant institution guarantee. Legalization means that laws admit the legalization of private placement funds, acknowledge the legal status of private placement funds, and not only set the market admission rules, but also supervise the operation. Fourthly, the paper focuses on exploring and mirroring the private placement fund laws of America and England. Both America and England are developed countries with excellent private placement fund markets, and they take defining the definition of private placement and qualified buyers as core of legislation, meanwhile, legislation also uses a series of fund Sponsors and administrators admission system to regulate the foundation of private placement funds. The private placement fund legislation of China should mirror successful experience of American and English legislations, taking the private placement and qualified buyers as an element of private placement funds, perfecting the related laws of these two systems and setting admission qualifications for the fund Sponsors and administrators.At last, the paper focuses on research of private placement fund supervision principles of China. The paper has analyzed the guiding effect of law imperfect theory, regulation transition theory and client equality theory, and settled the private placement fund supervision basic principles of China: Supervision fully principle, supervision moderately principle, classification supervision principle, combining self-discipline with regulation principle.