Operating Mechanism Research Of Privately Offered Fund Of China

With the 20 years' improvement and development, The capital market of China has had 1,700 listed companies, and has formed a comprehensive multi-level capital market system with the main board in Shanghai and Shenzhen, supplemented with the Shenzhen small and medium plates, the GEM (second board market), and the Transfer of Shares in Zhongguancun Agent Systems (third board market).Accompanied by the development of the securities market, the types and composition of the investors has undergone profound changes. The ordinary retail investors was the main investors at the inception of the securities market, but currently, funds, insurance companies, pension funds, qualified foreign institutional investors (QFII), and so all kinds of professional institutional investors have been the main investors of the securities market. At the same time, another professional institutional investor, the privately offered fund has also been a certain degree of development and growth, more and more frequently appeared on the securities market and the public view. However, as published in China by the end of 2003, "Securities Investment Fund Law" has completely removed the contents on the privately offered fund and therefore it has not yet a clear legal status in our country. So the privately offered fund has got so many criticisms by the lacks of operating mechanism and internal risk control. In order to make investors to have a more comprehensive understanding to the privately offered fund in China, this paper will have a detailed study on the privately offered fund through the following several aspectsAt this historical moment when the privately offered fund facing a very important developing opportunity, the object of this paper was to make investors to have a more clear, thorough, and correct understanding on the domestic privately offered fund's advantages, such as flexible transactions, sensitive to price discovery, perfect incentive mechanisms, as well as its current defects, and make the domestic privately offered fund to step into a sound, brightening and transparent developing track with the governmental supervision and the selection mechanism of "survival of the fittest".