The Legal Organization Of Investment Funds

By briefly introducing the origination and evolution of investment fund, summarising the elemental legal attributes of investment fund,namely the independence and sovereign external management of the fund,discussing the employed legal vehicles which include trust,investment company and limited partnership to satisfy such legal attributes,and referring to controversies incurred in the legislation process of Chines investment fund,this article explore,evaluate and envisage the legal forms of organization for Chinese investment fund.This article is composed of introduction,conclusion and three chapters of text,these five parts contain the following content:The Introduction explains that at the present stage investment fund in China is growing rapidly,it is losing direction as to its legal form of organization,some investment funds are in trial period,legal forms of organization and legal structures of investment funds are uneven or vague,thus presents the core issue this article intends to elaborate and explore,and the value and significance to the further development of investment fund in China by the clarification of such issue.The first chapter introduced three legal forms of organization available to investment funds.By analyzing the concept and historical origin of investment fund,summarizing the general nature of investment fund,and analyzing such nature,three legal forms of organization on which investment fund depends are put forward,namely,trust-type,corporation-type and limited partnership-type. On such basis,further analysis of these three types of investment fund and their respective advantages and disadvantages is undertaken.The second chapter analyzes legal forms of organization of investment fund. Referring to Chinese investment funds legislation process,it discusses the trust nature of Chinese contract-type securities investment funds,analyzes the trust legal relationships between parties to Chinese securities investment funds,states the opinion of "trust roles separation" between fund manager and fund custodian. The third chapter envisages the development trend of the legal form of organization of Chinese investment funds.Based on the current legal situation in China,it analyzes the possibility of amending the PRC Partnership Enterprises Law and establishing limited partnership-type fund,discusses legal impediments to the establishment of corporation-type investment fund and approaches to problem solving.Based on the discussion of the previous three chapters,it is concluded that investment fund may take trust,corporation and limited partnership as the legal forms of organization.When it comes to weighing these legal forms of organization,it is difficult to decide which is better,for each has its own strengths and weaknesses.In a country where the three legal forms of organization are allowed,market players have discretion over their choices.For the present stage,most investment funds are of trust-type fund.Limited partnership fund is developing,meanwhile,although there are legal impediments to corporation-type fund,supporters are pushing for experiments.