A Study On The Legal Regulation Of Internet Money Market Mutual Fund

In 2013, internet industry and finance industry created a new business pattern, which has brought great impacts on traditional finance industry in China. This year Alipay and Tianhong Asset Management Co. Ltd., a third-party payment institution and a professional financial adviser, promoted a new financial management product Yuebao. The essence of Yuebao is a kind of Money Market Mutual Fund, but the processes of fund promotion, purchases and redemption are all on the third-party payment platform. Therefore, we define this kind of fund as Internet Money Market Mutual Fund(IMMF). Because of Yuebao’s high interest, quite a lot of people withdrawal their current deposit and put it into the account of Yuebao. While people transferring money into Yuebao’s account, they are purchasing a money market mutual fund actually. After Yuebao’s great success, many other third-party institutions promoted their own IMMF. These new financial products have broken through traditional sales model of funds and reversed the market structure of fund industry in the past.IMMF, as a new product of internet financial management in China, has achieved a great success, as well as a series of legal risks.On one hand, IMMF is a great innovation for internet finance. On the other hand, whether third-party payment institutions taking part in MMF selling is lawful or not is still in dispute. These risks will be a threat to the order of financial industry. Therefore, IMMF should be regulated.IMMF is not first invented in China. Early in 1999, Paypal, the famous American third-party payment corporation, has joined in cooperation with professional financial management and launched its IMMF. Compared with the regulation on IMMF in China, the USA adopted functional regulation on IMMF. The experience in America can be used as a reference for China. IMMF industry is just getting started in our country so that there is no much legislation on IMMF. Measures on Regulation of Payment Services of Non-financial Institution is the first legislation in supervision of third-party payment institution. However, there is no specific rules about IMMF. As a result, it is necessary to learn from foreign countries to complete our regulation on IMMF.In Chapter 1,I introduced the development of internet money market mutual fund in China. After that I analyzed the essence, the characteristics of Yuebao and the dilemma that Yuebao has faced. As a newly created finance pattern, there is no much legislation on Yuebao. In Chapter 2, I discussed the legal risks of Yuebao both in theory and in practice. In order to draw a lesson from foreign legal supervision and management on IMMF, I introduced American Paypal money market mutual fund and its legal supervision in Chapter 3. In Chapter 4,I listed current legislations on IMMF in our country and made some suggestions to complete legal supervision system.