On The Private Equity Fund Regulation, The Laws In China

Investment Fund is a collecting investment characterized with sharing of benefits, collection of risk-bearing, which has been since its birth favored by the investors and has played an important role in the socio-economic development. It can be divided into private equity and public offering based on the different ways of issuing. Offering fund issuers have higher credit, and meet the mandatory requirement stipulated in the provisions of the Securities Department, moreover the prior approval is needed before the issuing, which result in its advantages of effortless of fund-raising, a wide issuing scope and high mobility. However, the public offering Fund is closely guarded, a high degree of monopoly, the strict conditions of market entry, making a number of entities, which wish to enter the stock market but fail to meet the prerequisite due to various reasons, cannot make it. At the same time, with the rapid development of the economy in our country and the growth in the wealth of domestic residents, under the great need of investment of the capital market, the private equity fund which has become an important institutional investors in both the foreign and domestic market came into being and the developed rapidly and the scale of which has changed a great deal in the capital market. As new things, due to the delay of the improvement of legal and related systems, a large amount of domestic private equity funds are still in the gray areas outside the legal regulation system. We must observe and study some fundamental problems of private equity funds in the development of our capital market from the level of domestic economic development, the situation of the financial markets and globalization of finance. Assimilate actively the related experiences and lessons of the foreign and domestic capital market from the perspective of system design and supervision to build a good functioning mechanism so that the private offering fund can develop in accordance with the regulation and order of our country, letting it to play an active role in promoting the modulation of our nation's economic structure and soundness of the capital market to realize the benign inter-action of the development of the Fund and the stability of the financial market. Therefore, using the experiences and lessons of both foreign countries and our own as reference to avoid harm and pursue benefit from the designing perspective and to make the private offering fund develop in a regulatory way has become a urgent problem that the science of law and the theory of finance need to solve. This article explains and expounds the legal regulation problem of private offering fund from five aspects. The first chapter is the general statement of private equity funds, mainly focus on the definition of private equity funds, the emergence and development of private equity funds and its characteristics, nature, classification, the similarities and differences between private equity and public offering to analyze the basic theory of private equity funds. The second chapter introduces and analyzes the legal system of developed and mature private equity capital market and mainly comparatively analyzes the legal rules of private offering fund in US and Britain. Chapter III talks about current developing situation of private equity fund in China and the existing problems. It analyzes the history of development and current situation of private equity, reflects on the existing problem of private equity in the operation of China's stock market and the potential risk and actual damage to the capital market and the related participants resulting from that. Chapter IV concerns the selection of developing path of private equity fund in China and how to realize the effective legal regulation to it. Additionally, it analyzes and comes up with the solution to effectively regulate the private fund in the aspects of legislation, administration and judiciary.