On Improving The Supervision And Management System Of Privately-offered Securities Investment Fund

The privately-offered securities investment fund refers to an asset collection of investment portfolio, mainly investing in secondary market stocks, bonds and other securities products. It is privately raised on a particular object. In recent years, the market of privately-offered securities investment funds is growing rapidly in China, but the Law of the People's Republic of China on Securities Investment Fund adopted in 2003 has not brought privately-offered securities investment funds to the range of legal regulation. Regulation departments have not established a complete monitoring system. Many privately-offered securities investment funds are walking on the edge between the legal and illegal, which has greatly undermined the healthy and stable development of China's privately-offered securities investment funds and its financial market. Therefore, it is very urgent and important to establish a monitoring system of privately-offered funds according to China's national conditions and international regulatory trends.The first chapter focuses on the analyses of the concepts of private placement, securities investment fund and privately-offered securities investment fund, summarizes the differences between privately-offered securities investment funds and features of general securities investment funds, compares the forms of the three private securities investment funds including corporate fund, limited partnership fund and contract fund. It is hoped that this chapter through its explanation will give you a basic knowledge and understanding of privately-offered securities investment funds. Chapter Two elaborates the development process of our privately-offered securities investment funds, their existing forms and current regulatory requirements. After the analyses on various types of privately-offered securities investment funds including"Sunshine Private Placement", trusted investment offered by securities dealers, managed account provided by fund firms, financial products offered by commercial banks and privately-offered agreements, the article concludes that China's current regulatory system of privately-offered funds is not complete and unified. Its content has a problem of public-offering tendency. Therefore, it is essential to establish a complete monitoring system of privately-offered funds. Chapter Three, integrated with the financial reform acts passed in the western nations after the 2008 financial crisis, focuses on analysis of the regulatory systems of privately-offered funds in the USA, EU and UK in the aspects of monitoring philosophies, regulation patterns and specific regulatory systems. In addition, it points out that China should learn supervisory experience from privately-offered funds in mature markets overseas so that China will be able to make better use of its own advantages as a late starter and exert appropriate supervision upon its privately-offered securities investment funds. Chapter IV offers specific advices to improve China's regulation system of privately-offered funds, indicates that legal status must be granted to privately-offered securities investment funds and makes clear that the goal of regulating privately-offered securities investment funds is to protect the interests of investors, to prevent systemic risks and to safeguard the securities market order. It is very necessary to establish a unified regulatory system and standards with self-regulation supplemented by mandatory supervision. In addition, it puts forward my own vision on the specific system design of private- placement securities investment funds in the aspects of investor qualification system, non-public Offering systems, privately-offered fund management system.