China's Private Equity Investment Fund Law Regulation Research

As was indicated in the relevant report in 2001, there were thousands of Private Funds in China in that year. By April 2007, the Scale of Chinese Private Fund had exceeded 1000 billion. In 2008, over 800 Private Funds were issued. In 2009, with the emerging of growth enterprise market, tens of Private Funds invested companies successfully got public listed. The development of private fund in China is getting quicker and more prosperous. However, in the contrary to the rapid growth in private fund practice, the legislation in such field is far away from perfection (to some extend even "no legislation"). China is still in absence of a unified, effective Private Fund monitoring system.The damages of lacking of monitoring system on Private Fund were well exposed in the global economic crisis started in year 2008. Leaving the operation of fund un-regulated and solely be depending on the market itself will eventually harm the interests of investors (the United States v. Bernard L. Madoff,09 Cr.213 (DC) well elaborated this) and the public interests and lead to the explosion of systematic risks. The western developed countries reacted quickly on this and had taken measures to enhance the monitoring on Private Fund, among which, the United States issued the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010, and the European Commission has pass the Directive on Alternative Investment Fund Managers through an overwhelming majority.This dissertation is to provide advises on establishing and perfecting the monitoring system for Chinese Private Equity Fund by analyzing the development, operational risk and the necessity of monitoring system of Chinese Private Equity Fund and to conduct researches on the overseas legislation on the Monitoring the Private Equity Fund, so that to better protecting the investors, to maintain the safety of the market, and to accelerate the healthy development of Chinese Private Equity Fund.The dissertation is consist of five chapters. Chapter One introduces the definition, characters and operation procedures of Private Fund. Chapter Two introduces the current development of Private Equity Fund in China, which will include the introduction on the current situation of market, legislation and monitoring system and to raise the issue for lacking of legislation and monitoring system on Private Equity Fund in China. Chapter Three will raise the necessity of establishing and perfecting the monitoring system on Private Equity Fund in China via analyzing the operational risk where in absence of the same system. Chapter Four introduces the overseas legislation on the monitoring system on Private Equity Fund, the researches are mainly conducted on the legislation in USA and touch the rules in other countries and regions like Europe, Japan and Taiwan. Base on the analysis and researches in the previous four chapters, it is of the writer’s point of view that, to establish and perfect the monitoring system on Private Equity Fund in China, we shall firstly confirm the frame works, such as target and principal, and following by the designing of system and content. The content shall include:the recognition of private offering, qualified investors, re-sale limitation, fund manager, and declare and registration.