Status Of China's Private Placement Funds And Its Legal Supervision

Private placement funds ('private funds'), a kind of investment funds, is widely known as its nature of'private'which is opposite to'public funds'. The difference between private funds and public funds is the mood of their collection against investor's money. Private funds is a typical investment funds– the manager invest in several financial fields such as the markets of stock, share, bond, etc. with the money collected by itself from investors. Private funds'investors should be rich institutional investors or individual investors and should not collect money publicly.There is no an exact definition for private funds in China. For private funds in the legal definition, theorists and practitioners have been in dispute. In China, private funds are often confused with illegal funds-raising. From the fundamental point of view, the legal nature of private funds can be viewed as a legal relationship similar to trust. In practice, many private funds are organized in trust, limited partnership, corporate or other forms of operation. China's private funds started last ten years before, and in its process of development, there are quite a number of issues, such as legitimacy, internal normative, external control, operational aspects and other issues.Learn from the advanced countries'experience on private funds' legislation, and based on China's realities, it is very urgent to establish the legal system of China's private funds which shall be extremely meaningful to China's fund industry and shall surely have a very important practical significance.In this paper, I, the author, used multi-dimensional analysis, including an overview of private funds, related concepts and connection, history, current situation, etc., trying to find the problems of private funds and its legal systems. With reference to the maturity of the legislative and regulatory experience from advanced countries, and to China's conditions, especially the case of Xinjiang Delong Jinxin Trust's illegal funds-raising, I tried to design a good mood for private funds'legal system and its supervision.