Research On The Regulatory Legal Issues Of Limited Partnership Private Equity Fund

Limited partnership private equity fund refers to a fund way which takes thelimited partnership as the organizational form and in which the fund manager as ageneral partner and the institutions with investment strength or individual investorsas the limited partner sign the partnership agreement, and they raise funds in anon-public way to invest the target enterprises which have development potential,and they eventually make a profitable exit after the target enterprises add valuethrough listing, merger, repurchase and other forms. Its system advantages areembodied in not paying the enterprise income tax to avoid double taxation;low investment and high return of compensation incentive system stimulate thesubjective initiative of fund managers; the contractual of the limited partnershipagreement makes the partner have a greater autonomy, while private property makesinformation disclosure looser.At the same time, this thesis also systematically analyzes the risks of limitedpartnership private equity fund in various stages of establishment, operation andexit in our country. The main risk in the stage of establishment is the accessproblem of qualified investors and fund managers. Unqualified investors whoparticipate in fund will lead to the production of "illegal fund-raising" not requiringmanagers to have qualification can lead to limited debt repayment ability and themoral risk of irregularities; the risks in the process of operation include theadverse selection problem on microeconomics which is caused by managersinformation superiority,the division dispute of execution permission of partnershipaffairs between investors and fund managers as a result of the unwillingpassive position of the investors, and the monopoly risk and financial risk causedby the market failure of private equity fund; in the exit stage, the risks includenot only the risk of limited exit channels caused by non-establishment ofcurrent multi-level and gradient capital market, but also the exit problems broughtby existing unsound exit mechanism.In order to prevent and control above-mentioned risks, our country legislationhas made beneficial exploration on its regulatory issues. Before2013, the regulatoryLegislation about limited partnership private equity fund in our country wasrelatively fragmented, and it was all involved in "securities law", the company law, the trust law,and Partnership Enterprise Law. In2007, the revised "PartnershipEnterprise Law clearly defined the subjectivity of the " limited partnership"enterprises, providing a legal basis for its organization as private equity funds.The new "securities investment fund law" implemented in2013affirmed the legalStatus of "private funds" for the first time, and made specific regulations used forself-discipline guild.But the law limits the scope of application to the behavior of"securities investment", leading to the dispute about whether the behavior of"equity investment" can be applied. On August21,2014,"interim measures for thesupervision and administration of private equity investment fund" issued by theSFC is the first systematic specialized legislation about private equity funds in ourcountry. On December31,2014,"Notice on improving related work of registeringand recording private equity fund managers "and Notice on asking for advice ofimplementing the classification and publicity system for private equity fundManagers" released by the industry association mark the refinement trend ofRegulatory. There is no denying that, however, the level of above-mentionedspecificlegislation is low level,and"Notice" also belongs to guild self-discipline Associationregulation. There are still many imperfections in specific legal regulation. Inrecent years,the further promotion and the development of limited partnershipprivate equity funds also make it face a new regulatory difficulty.The impact of the financial crisis made the supervision concept abroad intendedfor limited partnership private equity fund develop from the relaxed encourage tomoderate supervision. The Obama administration has changed the registeredexemption rules and expanded the fed’s supervision right, reflecting the conceptof classification regulation tempering justice with mercy. Britain appropriatelystrengthens the supervision and makes strict information disclosure requirementsunder consistent self-discipline supervision mode. On the basis of drawing lessonsfrom foreign legislative experience, the author proposes moderate supervision, thebalance of rights and classification regulation should be regarded as the principleto perfect the legal regulation of our country’s limited partnership private equityfund. Specific regulatory measures include: reconstructing system of qualifiedinvestors, strengthening the management responsibility, strengthening informationcommunication, perfecting the current regulatory system, building a smooth exitmechanism. Only in this way can they better develop the system value of limitedpartnership private equity fund, prevent and control the risks, protect the legitimate rights and interests of investors, maintain the sustainable development of funds andmarket security.This thesis mainly uses the methods of interdisciplinary research, comparativeResearch and empirical research,and attaches importance to the referential value ofpractice of the theory. At the same time, many policy adjustment measures and legalnorms involving the limited partnership private equity fund was introduced in thesecond half of2014. Thus the research of this thesis has a certain timeliness andfrontierr.