Legal Issues Of China’s Sovereign Wealth Fund Regulation

In recent years, the Sovereignty Fortune Fund develops dramatically, and up to now, thetotal amount of the worldwide Sovereignty Fortune Fund has been USD3150billion. As theimportant investor and participator in international finance market, the Sovereignty FortuneFund earns more and more close attention from western developed countries for its hugecapital scale and great effect to international finance market, which supervises and managesSovereignty Fortune Fund more strictly, especially to Sovereignty Fortune Fund in newlydeveloping markets in some countries. China Investment Corp (CIC) acts a new participatorin Sovereignty Fortune Fund market, is the only one Sovereignty Fortune Fund in China.However, its legal status could be further improved and the risks management control andprecautions stipulations are to be improved. To the problems that CIC is faced with, weshould perfect the legal stipulations to improve the performance of CIC’s investment ininternational finance market.The text mainly analyses the legal status, risks and problems happened during risksprecautions for Sovereignty Fortune Fund in details, and analyses the problems that CIC isfaced with in this aspect and the ways how to perfect the CIC. One the whole, the text isdivided into three parts:Part Ⅰ Legal Status of Sovereignty Fortune FundAt first, analyze the property of assets, management structure and investment methodsfor Sovereignty Fortune Fund in theory, then define the CIC’s legal status by discussingdetails of CIC’s property of assets and management structure.Part Ⅱ Risks Precautions of Sovereignty Fortune FundFirstly, this part mainly analyze the country risks, investment risks, market risks andoperation risks that Sovereignty Fortune Fund is faced with in theory, following by detailanalysis of our countries’ risks, which takes an example of CIC.Then details aboutinformation disclosures and transparency of risks precautions for Sovereignty Fortune Fund,mainly talking about the specific rules for information disclosures and transparency and theexisting problems of Santiago Principles, then take the Temasek for an example to analyzetheir information disclosures and transparency system, pointing out that CIC’s problems anddefects in information disclosures and transparency. Finally, analyze NPFG’s risks management and precautions system in details.Part Ⅲ Perfect Legal Supervision of Sovereignty Fortune FundRegarding the defects of CIC’s management structure, information disclosure,transparency and the risks precautions system, put forward the good advice to perfectSovereignty Fortune Fund system.