Research On Improving The Governance Structure Of Contractual Security Investment Fund In China

Contractual-type mutual funds are a kind of property management system,greatly promoting prosperity of the fund market. But internal conflict of interestamong parties, for the investment funds, as a special kind of trust, have the structurethat the property rights and the beneficiary are separated, and that is to say the partiesof the right and interests are separated. The fund managers have the core power in thecontractual securities investment funds in China, and operate the fund property; at thesame time, fund trustee is responsible for the warehousing and supervision of the fundproperty. This special system arrangement leads to fund holder status weakening, andtheir right being damaged. Therefore the contractual-type mutual funds are not on theright track. In practice, the maximum rights of the fund investors can not realize forthe following reasons. First, the shareholder’s meetings work ineffectively and the“rational indifference” of the shareholders and their psycho of “hiking”; Second, fundmanagers violate compasses operation, observe professional ethics and do frequentaffiliated transactions; Fund trustee is the lack of independence, supervision andunderpowered. The defects of compact funds management structure damage theinterest of investors seriously, and directly restrict the normal development of thefund in our country.In order to realize the fund holders’ benefit maximization, we should improvecontractual investment fund management structure, especially internal governancestructure in legislation. The specific way is that we introduce the big shareholders,forthat investors have a system can build, and reduce the investors in the fund thethreshold of the general meeting of the holders, fully realized for the supervision ofthe administrator rights investors; We can construct the constraints and incentivemechanism of fund managers constantly, introduce reputation mechanism, encouragefund managers have fund long-term control right, and implement employeeshareholding to realize equity incentives. These can also encourage the manager towork hard. As for the standard of fund trustee supervision system, it is proposed thatwe can introduce the independent committee inside fund trustees. In that way, thefund trustee can genuinely work independently. Perfect securities investment fundmanagement structure is the key to protect the interests of investors, and is also theimportant way to promote the healthy development of the fund. Securities investment fund management structure in our country should go towards to international marketunceasingly and perfect constantly. Only in this way can we promote the developmentof the fund and the stock market boom.