Study On Legal Supervision Of Private Equity Funds

Privately offered funds developing rapidly in recent years, has been an important investment and mode of financing in China’s capital market.There are still some problems and risks with these large-scale privately offered funds because of lacking of confirmation of the law and regulatory. It is imperative to address the problems in the fund, forming legal supervision and management on it, make it a healthy development in the legal system.This paper consists of six parts. The first part is the introduction. The second part focuses on the need for regulation of privately offered funds. From the definition, classification and development situation in our country, some of its features and shortcomings are concluded. Next study the market risks of the privately-offered funds, which include the asymmetric information in the operation and the potential systemic risk. Third, clear the necessity of privately offered fund supervision. Last, the importance of legal regulation of the privately offered funds is briefly analyzed.The third part mainly discusses the current situation of regulatory and existing problems of private fund in our country. Several problems of supervision in our country are given, such as the unclear regulatory thinking, lack of regulatory legislation, vague qualification of investors, inadequate disclosure of information, lack of unified regulation among sources of funds, investors and shortage of talent and easy to breed corruption, money laundering and other criminal activities.The fourth part firstly analyzes the privately-offered funds’comparative advantage, and then discussed supervision concept in full consideration of both to take the advantages of the fund and to control the operation, trying to reach a balance between them. Then under the guidance of the fund supervision concept, principled requirements are offered.The fifth part mainly studies the choice of legal supervision mode for privately offered funds. First of all, the government supervision, self-discipline supervision and compromise regulation of the formers are introduced, with a comparative analysis the advantages and disadvantages of the three kinds of the modes. Then, according to the result of the analysis, combined with China’s national conditions, the regulatory model, in which administrative regulation and self-discipline regulation should be paid equal attention to, is put forward.The sixth part, from legislation, mainly discusses how to perfect supervising on the privately offered funds. Based on the mature experience of other countries for reference, some suggestions on the legal regulation are put forward. These includes the following ones: considering legal regulation from establish links of privately offered funds, legal regulatory enforcement on the exiting link; tight restrictions on publicity of the fund; demanding for legal regulation for its inventors; explaining how to make law regulation for information disclosure; legal regulation for its sources.