Study On Legal Regulation Of Sovereign Wealth Fund

Because of the character of "sovereignty ", Sovereign Wealth Funds (SWFs) areusually established or managed by their governments. They are rather different from thegeneral investment funds. Recent years, SWFs’ overseas investment has attractedattentions all over the world, especially after2008global financial crisis. Most SWFs havegood effects on economic promotion of the country they invest in. However, it also raisesfears and doubts as well.In this paper, comparative analysis, empirical case study method, literature referencemethods were systematically used for discussion of the domestic regulation andinternational cooperation of sovereign wealth funds. The domestic regulation includes theregulation of the home country and the host country. At the international level, SWFs areconstrained by bilateral treaties, the guiding principle of international organizations and theexisting multilateral agreements. From the point of the home country, the different sourceof funding, leading department, the legal nature of the fund and the supervision regulationare all important aspects when determine how much “Sovereign Property” the fundsretains when being established. And it is obvious that the more it retains, the more itpossible to be blocked when facing the overseas investment program. When comes to thehost country, it aware that the SWFs can provide a long-term and stable investment, butstill cannot eliminate the worries about the interest of national security. So normally it willset up a review mechanism to go through. An effective review mechanism should not beconsidered as a protectionism tool.In addition, the status of sovereign wealth funds, the transparency of the openstandards, and whether the fund itself could invoke sovereign property exempt underinternational law are also the aspects worth paying attention to.