The Governance Mechanism Of Securities Investment Fund Management Corporate

As an institute arrangement concerning interest sharing and risk sharing of collective investment, Securities Investment Funds have developed very rapidly since its inception that has become the indispensable investment tool of the world’s financial markets, which plays an increasingly important role in the development of the securities markets. As of December31,2011,66fund management companies have totally issued914funds. The total size of the share of the assets of the fund management companies is2.646465trillion. The management of the fund net asset value is2.187979trillion Yuan. The fund management company has an important impact on the securities market as a core role of the Securities Investment Fund.However, nowadays China’s securities investment fund management companies are problematic. Fund shady, fund scandal and other incidents are seriously damaged the interests of the majority of fund investors, which prompt the theoretical and practical community in-depth reflection. Therefore, it is the practical problem of great significance to explore how to deal with the problems of the current fund management company and the interests of effective protection fund holders. Fund Management Company’s governance mechanism includes two aspects:internal governance mechanisms and external governance mechanism. Among them, the internal governance mechanism includes internal governance structure, incentive and constraint mechanism, risk control mechanism; external governance mechanism includes supervision mechanism and the market mechanism. The market mechanism is of great significance for corporate governance performance improvement, which is out of the business for the subject is limited.This paper tries to explore and put forward feasible suggestions from the securities investment fund company internal governance mechanisms(internal governance structure, the fund manager incentive and restraint mechanisms, risk control mechanisms) and external monitoring mechanism(government administrative supervision, two aspects of the fund custodian oversight mechanisms, industry self-regulatory mechanism) The article is divided into four parts:The first part is an overview of the securities fund management companies, including funds and fund management company overview, an overview of the governance mechanisms of the dominant position in the fund and the main legal and fund management companies.The second section discusses the securities investment fund management companies’internal governance problems. First, the problems include fund management companies in the internal governance structure of the board of directors and independent directors, board of supervisors, inspector. Followed by the fund manager’s hiring and salaries, incentives and accountability mechanisms. Finally, the issue of risk control mechanisms, including the concept of risk management is weak, the risk management system is not perfect, and poor risk management techniques.The third part is the improvement of internal governance mechanisms of the securities investment fund management companies, which are mainly for the problems from the second part and propose appropriate solutions, including optimization and improvement of the internal governance structure of the Board of Directors, Supervisory Committee and the Inspector General system, reform of the fund manager responsibility and incentives, improve the securities investment fund management companies internal risk control mechanism.The fourth part is the external supervision of the existing problems and improves the measures of the securities investment fund management companies. Begin with the existing external regulatory model, the regulation of the legal system and unreasonable, and then solve the problem, put forward reasonable proposals to improve the mechanism of the external supervision of fund management companies, including the improvement of the legislation, raising the level of the industry self-regulation, strengthening the supervision of the custodian and so on.