China's Private Equity Investment Fund Regulation

Private Equity Investment Fund is a fund attracting investments from a limited number of investors through non-public means for the purpose of investing in the equity interests in the companies which are not listed on any public stock exchange. The fund, being as an integral part of the capital market, boasts of its expertise and high profit which is highly recognized by the investors. It plays an important role in promoting the social and economic development. Currently China’s private equity investment market is quite active. However, China is lack of a unified system to regulate the private equity investment fund in China, which results in a series of actions or matters that contradicts the PRC laws.The private equity investment fund is originated from foreign countries. They normally adopt loosen policy on the regulatory of fund. However, after the outburst of subprime crisis in 2008, the U.S. is forced to take the substantial actions in reforming the regulatory system of the private equity investment fund. Based on analysis of the feature and risks of the fund and the comparison of the regulatory system applicable in the foreign countries and also the study on the U.S. regulatory reform after the financial crisis, by reviewing the status quo of the regulatory system in China, this thesis is to put forward some suggestions on the regulatory and development of private equity investment fund in China.This thesis comprises 5 chapters:Introduction:mainly setting out the background and meaning of the selected topic, literature review and research methods.Chapter 1 mainly setting out the fund’s legal definition and the underlying definition of the legal regulatory form.Chapter 2 mainly setting out the Overview of the Private Equity Investment Fund in China, including the background and status quo of the fund in China and also brief analysis on the existing problems in the Chinese regulatory system through a case study.Chapter 3 mainly setting out the Regulatory framework of the Private Equity Investment Fund in the foreign countries, including he introduction of the fund in the foreign countries, the operation mode of the fund, the comparative analysison the supervision of the fund in the U.S. and the U.K., research and study of the free market economy, the emergence and development of the shadow banking system and also a brief introduction of U.S. regulatory reform on the fund after financial crisis.Chapter 4 mainly setting out the Discussion on How to Improve the Regulatory System of Private Equity Investment Fund in China based on the discussion and analysis on the foregoing chapters, including putting forward the suggestions on the regulatory system, including consummating the theoretical structure of the regulatory system, establishing the legal basis of the regulatory system, improving the legal regulation of the regulatory system, specifying the regulatory body and industrial association organization, etc.