A Study On The Legal System Of Supervision On Qualified Domestic Institutional Investors

Qualified domestic institutional investors(QDII) is a regulatory mechanismto allow domestic investors who live in countries and regions where the capitalmarket is not completely open to invest in overseas stock markets. On one hand,it is a transitional opening door policy on capital market, which plays a positiverole in exploring the opening of capital market, easing pressure from foreignexchange reserves and appreciation of the RMB, broadening the investmentchannels for domestic investors, cultivating mature institutional investors, andpromoting financial supervision system and so on many aspects. On the otherhand, investors bear double risk within and outside market at the same timebecause of the nature of the foreign investment. How to resist those risks andmake QDII plays its positive role is a issue worthy of study. In order to providetheoretical reference for the perfection of the financial regulation system inChina, the writer mainly discusses the perfection of China’s legal system ofsupervision on QDII under the background of financial globalization. This thesisis divided into four parts:The first part gives an overview of the basic issues concerning of the legalsystem of supervision on QDII. It includes the concept, the development historyand characteristics of QDII in China. It also indicts the definition and features ofthe legal system of supervision on QDII. It supplies a theoretical basis for thefollowing research on the legal system of supervision on QDII.The second part mainly expounds the legal system of supervision on QDIIin South Korea, Taiwan and Chile. The emerging-market countries’ experienceenlightens us in thinking about how to improve and develop QDII in China.The third part is the core part of this article. It mainly discusses the defectsof process of regulation, specialized supervision, information disclosure system,dual custody system and cross-border supervisory cooperation and so on. Itreveals that only by constructing the legal framework of supervision on QDII andperfect the the specific laws and regulation can China’s capital market bepromoted to open to the outside world and investors’ benefits guaranteed.The fourth part provides suggestions to solve the problems of the legalsystem of supervision on QDII in China. The suggestions cover the following five aspects: choosing suitable value choice of the supervision system,perfecting the supervision legislation, establishing Umbrella Supervision mode,completing the information disclosure system and improving the dual custodiansystem and enhancing international inspect cooperation.