Securities Investment Fund Internal Governance Structure Of The Legal Analysis

Goal of ThesisSecurity investment fund (hereinafter refer to "fund") is an enterpriseorganization form for aggregate investment. It centralize the investment funds byissue fund unit and convert theses funds to fund manager and trustee to pursuesecurity investment. In the recent years, at the drive of government policy formaking excess development of organization investment, fund industry has makegreat progress and plays an increasingly important role in the entire finance andtrade system. The first and foremost thing in security investment fund legal systemis protecting the interest of fund investors, to realize this purpose, establishing afine governance structure is absolutely necessary. Reality has show that a fine andreasonable governance structure for security investment fund will lead anincreasing and prosperous investment fund and will realize the legal purpose forinvestor protection.Comparing to the developed countries, the development of fund industries isstill at the startup phase in china. There existing a good many problems and risks init, and in author opinion, establishing a consummate governance structure is thegroundwork for the development of fund industries. The mainly problem nowexisting the fund industries in China is states as follow:First, the moral risk of fund managers can not get proper resolution as lackingeffective system for inside restriction and representatives on behalf of fundinvestors. The existing management regulation on fund investment can not preventfund manager's deal of interest conflicts and their impairing of investors.Secondly, the severely dissymmetry of information, the dissymmetry ofassuming risk and benefit for fund managers and the lacking of effectivecompetition in the market of fund managers all of these have restrict thedevelopment of fund industry.Furthermore, law and regulations concerning the govemance structure ofinvestment fund is still far form consummate, the administration by due authorityis newly start, the lacking of necessary safeguard mechanism have contribution thedamage of investors interest.At last, the unitary contract mode in governance structure makes holdersconference ineffective when representing the interest of fund holders. So the effec- tive of governance mechanism for fund investors has negatively influenced.This thesis has mainly analysis the governance structure of investment fundand proposed some constructive suggestion and measure from the view of system.One reasonable governance structure should make the protection of investors thefirst priority so that to realize the sufficient competition and reduction of cost. Theconsummation of fund industry in China needs our effort to establish the incentiveand restriction system for fund managers by regulating the interest distribution andrestriction of investment parties.Mainly content and analysis methodThis thesis has mainly analyzed the legal issue of investment fund'sgovernance structure by using the way of legal prospective, information economy,fabric analysis, history analysis and comparative as well as demonstration analysisway generally. The whole thesis has divided into four parts as follow:Section one: Summariz fion of governance structure in investment fund. Thissection has mainly instructed the concept, characteristic, categories of investmentfund and discussed the necessity and importance of governance structure byanalysis the separation of ownership and rights of management.Section two: The framework of governance structure. At one hand, authoremphasis the trust obligation of fund manager, on the other hand the supervisionduty of trustee and board of directors demonstrates the ultimate goal of investmentfund—the protection of fund investors while seeking the residual claim andresidual control as well as efficiency of investment.Section three: through optimizing the distribution and balance of rights andinterests of parties in investment fund. This part have controlled and converted thedisharmonious of fund manager's inspiration from five aspects.Section four: the development of governance structure in China. Afteranalyzing the theory and practice in investment fund industry, author have narratedthe absence of effective protection for fund investors, and proposed to introducedthe corporation investment fund whiling annotating the system design forintroducing this mew type of governance structure to China.