China Development Corporation, The Idea Of ​​the Securities Investment Fund

With the fast development of China's security market, the investment fund, as an institutional innovation in financing, has been progressing rapidly. The investment fund, as an institution investor, is taking on positive function in the stabilization of the capital market and the protection of the investors. However, there are still some important defects in China's investment fund industry, one of which is the lack of corporation fund. The single contractual type of China's investment fund has become an obstacle to the further development of the fund industry, which also is against the global trend of the investment fund. By theoretical and empirical analysis, this essay is focused on to clarify the inevitability of the corporation fund in China, after which a proposition about how to develop the corporation fund is given naturally. The essay is divided into four chapters. The first chapter is about the general idea of the investment fund, including the origination, history and current global situation of the investment fund; the comparison between the two types of investment fund, the contractual fund and the corporation fund; and the history and the current situation of China's fund industry. The second chapter explains the choice of China's fund type and the institutional and practical defects in the contractual fund. By comparing the institutional advantages of the corporation fund with the institutional defects in the contractual fund, it explores on the superiority of the corporation fund in protecting the benefits of the investors. The third chapter is a theoretical analysis on the corporation fund. This is also the innovational point of the whole essay. Taking the contractual and corporation funds as two different sets of contracts, it explains the difference between these two types of funds with a New Institutional Economics perspective, drawing a theoretical conclusion that the corporation fund is a more effective model in protecting the investors' benefits than the contractual one. In the fourth chapter, after analyzing on the global trend of the investment fund and the main problems that should firstly be solved before the development of the corporation fund, we make a proposition about how to speed up the development of the corporation fund in China from four aspects, that is, the interior governance mechanism of the corporation fund, the exterior situation of the capital market, the transformation of the contractual funds to corporation ones, and the investors' civil suit right. To develop the corporation fund in China is a wholly new cause. Although we have a lot of things to do preparatively, one thing can be expected definitely, that is the corporation fund must have to be developed in China.