Securities Investment Fund Internal Governance Checks And Balances The Protection Of The Interests Of Fund Holders

The securities investment fund is an invested organized system. In terms of forms, it includes contractual fund and corporation fund, but these two forms reflect trust quality. Because of different traits and constituency, contractual fund and corporation fund have different governance structure. The goal of the law of the securities investment fund is how to protect investors' profits. For this purpose, fund governance structure restricts the power of the manager (i.e. the Securities Investment Fund Management Company) through internal restrictive mechanism and external administrative structure. Actually, fund internal restrictive mechanism is the key to the sound development of the securities investment fund. By expounding the advantage of the U.S common fund governance structure and by analyzing the congential defect in the contract-type fund's governance of China, this article draws the conclusion that the feasible method of China's securities' investment fund should be done step by step. The organizational structure of the new fund should be issued in the form of corporate type, and when the condition matures, the exisiting contract type fund should be turned type fund. So this dissertation will study the internal restrictive mechanism of fund between contractual fund and corporation fund, in order that we can understand which is better. Through a dozen years of efforts, China's Securities Investment Fund is developing into a definite shape with the performance of its function and the building of its structure. But, some practical problems worry about the implementation of the securities investment system in China' capital market. There exists a problem that we should choose which type fund in China and this problem are not coming into agreement in academic circles. We know that contractual fund is the typical trust fund. But because of its structure it has inherent flaw. This inherent flaw makes restriction to the manager worse than we expect and it makes the absence of the represent of investors. Unlike contractual fund, corporation fund can protect the investors' profits well. In corporation fund system, Fund Company can represent investors to monitor the manager's behavior and it make up for the inherent of contractual fund system. Corporation fund internal restrictive mechanism is prior to contractual fund internal restrictive mechanism. The author thinks we need choose corporation fund governance administrative structure, which will definitely give impetus to the sound development of China's securities investment fund.