Private Equity Fund Legalization

This paper including the introduction and the text, the text consisted of three parts.In the introduction of this paper, through the legal analysis of private trust fund, noted limitation of the Trust as a form of private placement fund, Trust be thoroughly resolved the issue of legalization of private equity funds. "Private placement fund sunshine" movement can not truly make private fund "sunshine", which leads to the issue of this paper intent to resolve: private placement fund should be legalized? How legalization?Text includes the following three parts:The text part: related concepts of private placement fund and the need for the legalization of private funds. The definition of private placement fund: private fund is the fund no public offering faced to specific investmentor. On the system methodology, distinguish between the private placement fund and the public offering fund, private placement and illegal fund raising, in connection with the development and the need for private funds.The second part: the United States private fund legal system and inspiration to china. Private placement funds in the United States is the most mature, the legal system on private placement fund is good and flexible. It is worth china in the legislative reference. With the famous SEC V.RALSTON PURINA CO. the paper introduce the details of legal system on U.S. private placement fund. Such as standards of private placement, qualification and number of investmentor, the disclosure of information systems, aggregate inspiration to china.The third part: in line with the national conditions of china, construction private placement legal system. In this part, the legislative path and specific rules has been designed: as to the legislative path, china should consolidate existing laws and regulations on fund. Draw up FUND ACT. Private placement fund can be a part of the law. China should not be implemented fully the establishment of private exemption from registration. A filing system can be used to achieve the appropriate regulation. As to investor qualifications, investors should distinguish between natural and corporate investors, private equity fund and private industrial investment fund. To do so can make different provision. As to information disclosure system, the private placement fund not to disclose information to the public, but its obligations to disclose information to investors and regulatory agencies can not be removed. To prevent resale which elevated private placement legal system, Chinese law should define the target of investor resale. The paper presents a "qualified reciprocity" principle and the "one-on-one" principle, "all negotiable" principles. Chinese private placement fund may take the company system, the trust system, the limited partnership system. The law should support partnership to encourage the development of private placement funds.