The Legal Status Of Private Securities Investment Funds

The emergence and quick development of private equity fund is actually the internal requirement under our stock market. It is significantly important to develop private equity fund when we develop and manage our stock market. However, although private equity fund is no more uncommon in the stock market, it is still in a gray area under legal system due to the lack of regulations and its unclear legal status. As the result, it is not regulated well and can even result in great risks to the society system because of the lack of supervision. This article believes that it is necessary and feasible to recognize the legal status of private equity fund. And from this perspective, the author is of opinion that in China, we are ready to regulate private equity fund with lawful status. The article also compares overseas legal systems of private equity fund and studies the current status of the private equity fund in China. The author further analyzed the problems of the private equity fund in China and the reasons thereof. Additionally, the author tries to dig on the risks under our current private equity fund system and offers possible solutions. This articles ends with the proposals to some critical problems to structure of our future private equity fund. Trust could be an advisable way to legalize our private equity fund. This article especially states the issue on how to legalize the private equity fund. By the way of comparison and offering evidences, the author tries to prove the below opinions: China should speed up the legislation for private equity fund and legalize its status. Only with this can the problems be prevented or solved, can the players refer to laws and regulations in the market and can the supervision officials regulate the market based upon applicable laws. Therefore, the private equity fund can develop under regulated structure, which is rather critical to the healthy development of our stock market.This article has five chapters. The first chapter, as the general introduction on private equity fund, mainly focuses on the definition, characters and legal nature of private equity fund. The chapter compares the regulations in the US, British and Japan and specify the definitions of private equity fund. The second chapter is the development situation of our private equity fund. By the research on its development stages, current situation on supervision and existing forms, the author tries to offer direct basis for future legislation on private equity fund. The third chapter is the necessity and feasibility to establish legal status of private equity fund in China. Whereby, the article tries to state that the timing and conditions are ready for legislation of private equity fund. The fourth chapter is to design our legal system on private equity fund, to present potential risks if the supervision operates inefficiently and possible solutions. This chapter tries to offer legislation suggestions by researching some key problems in the private equity fund and to design the legal system. The fifth chapter is to legalize our private equity fund. The author studies the current situation of our legal private equity fund and its creativity, and states that to corporate with trust company to issue trust private equity fund is one of the primary channels to legalize our private equity fund.