Financial Trust Regulatory Legal Research

The financial trust refers to the trust that manages and processes all kinds of financial service. It is one kind of the modern property control systems that takes the property as the core, the credit as the foundation, and the entrusts as the pattern .Under present capital market environment, on the one hand, lacking the investment channel the massive social idle fund can not be utilized effectively ;on the other hand, the investment enterprise lack the essential support because they are limited by fade-out financial expenditure and credit of banks, which seriously affect their developments . While the financial trust has played a vital role on that. Under the present legal system, it has more superior than other financial organizations in capital maket. So, the financial trust goal is unable to realize without effective legal supervision, even it may initiate the financial crisis. This is the main problem which this article needs to solve.Financial trust legal supervision has its own rationale, which are the financial exteriority theory, the unsymmetrical information theory and the public interests theory. The financial exteriority theory pointed out that, the outside existence hints the malfunctioned market mechanism, therefore, the intemalization of financial exteriority theory becomes the reason which the government's law rationale to formulate the supervision. The unsymmetrical information is widespread and cannot be solved by the market, which requires the the legal rules and regulations formulation, the communities who have more information should initiatively open the essential information to the public to reduce the unsymmetrical information as far as possible. The public interests theory believed that, the goal of government's supervision is to control the abusive rights of the supervised, and the government can make the rational computation to the market and the enterprises' behavior to improve the public interests.Presently, US, Japan and England are the developed countries in legal supervision of financial trust. From their experiences we can enlighten: The mature legal system is the premise to improve the financial trust supervision; the explicit legislation is which we can make these different patterns to produce the good effects; Governor's supervision rights must be limited in the relative laws, avoiding intervening excessively. These have an important significance to our country finance trust supervision law.In our country, financial trust industry origined in the beginning of the 20th century in Shanghai. "Shanghai commercial trust company", established in 1921 ,is the earliest trust company in our country, but it was not regulated at that time . After the foundation of the Republic of China, it gradually lost because of the restriction of economy and the passive influence of financial trust industry. So the legal supervision was neglected. After the reform and open policy, with the economical development and the requests of the large-scale infrastructure, supposed the trust consultation department was refounded by the Bank of China in 1979, and the Chinese International Trust Investment Company was also established in the same year. Our country's financial trust industry revives under the reform and open policy.Although we never loosen the legal regulations of the financial trust and all kinds of temporary provisions and the notices has been promulgated by People's Bank of China, with the increasing services and projects of the financial trust, the financial trust law are still lagging and insufficient, which has affected the development of the entire financial industry. Therefore, it is most important to consummate the finance trust law. The financial trust law should include the trust fundamental law and the financial trust industry law. The "the People's Republic of China Trust Law" which promulgated in 2001, is looked as the financial trust fundamental law. In addition, we also should have the special regulations. But in our country the only special regulations of financial trust law is "Financial Trust Investment Company to entrust Loan business Stipulation" which was promulgated in 1993. "Trust company Policing method" which was promulgated on March 1, 2007, differs from the above law on the establishment, supervision and so on, but it still lacks the specific regulations of the financial trust. To present, it is still an important arrangement to enforce the legislation on the financial trust.Consummating our country's financial trust supervised law is the intrinsic requests of the stability of the financial system and the harmony of economy. Above all, we must follow the scientific and reasonable financial trust principle, for example: the legal Supervision principle, the financial sustainable development principle, the enhancive cooperation and the scientific adoption principle and the controllable risks of morals principle. Secondly, we must optimize the external and internal supervising measures of financial trust, and we also should make laws to regulate the emphasis, the patterns and the systems of supervision, thus we can enhance the practice of the financial trust supervision law.