The Study Of Supervision Of Private Securities Investment Funds

From the beginning of the 90’s of last century, a financial innovation was set off in the world. All kinds of financial derivatives are emerging. The private securities investment fund with investment freedom, lucrative and other advantages were widely accepted by investors, which had obtained the fast development. Along with the deepening reform in economic and the goal to build a multi-level capital market was put forward in China, the private securities investment fund have become an important part of the new capital market, which made a difference in promoting the upgrading of industrial structure and activating the capital market, and to meet the financing needs of small and medium enterprises. It also was commonly used by the people in asset investment.The new "securities investment fund law" had set a special chapter on regulating the private securities investment fund, which solved the problem of identity in law, which had made a trouble of itself development for a long period. It is a great significance for the stable operation of the market to regulate the industry. However, China’s market economic system is still not perfect. The multi-level capital market system has not been established. There are still significant gaps compared with the developed countries in the private equity fund industry development. Market risk prevention, the protection of the interests of investors is not enough. Risky investments, illegal operations, even under the guise of illegal fund-raising phenomenon occurs frequently. There are unreasonable issues and many problems especially in the design of the legal regulatory framework. 1. The regulation is similar between the private equity fund and the public offering, which bound the vitality of the market and also increase the system risk. 2. The multi supervision and administrative supervision led to low efficiency. And the regulatory rules are not uniform. 3. The legal liability system is not perfect, the lack of civil liability provisions, which is difficult to achieve a comprehensive maintenance of the interests of investors. These defects have been found in the market structure, which constitute instability of the market. Therefore, adjusting and refining the operation rules of private securities investment fund, constructing the system of industry self-regulation, government regulation and industry self-regulation, achieving perfect coordination of government regulation and industry self-regulation were needed. It will promote the establishment of a multi-level capital market, promote the upgrading of industrial structure under the background of "the new economic normal".The first part of the paper is a general elaboration for private equity fund, which analyzes its legal characteristics, highlighting the private equity fund’s "private" features, and introduces the typical mode of operation of private equity funds and special reward incentive mechanism. I also analyzed it with other similar concepts in contrast.The highly controversial theory about whether regulation of private equity funds and how to carry out the real time operation, the author has carried on the system response from China’s current situation, legal regulation of government regulation theory and the role of regulation three, that our country must as soon as possible the construction supervision system of compromise. In addition, the author also analyzes some prominent problems existing in China’s regulatory framework. 1. The regulation is similar between the private equity fund and the public offering, which bound the vitality of the market and also increase the system risk. 2. The multi supervision and administrative supervision led to low efficiency. And the regulatory rules are not uniform. 3. The system of qualified investors is not perfect, which is lack of operability in practice and the detailed rules for the implementation to further. 4. There are a large number minimum guarantee income terms in the design of fund contract, which can became a "invisible bomb" to harm the development of private market. 5. The source of private equity fund is not clear, and some of the operation modes are illegal. There are still risks resulting in loss of state assets. 6. The fields of private equity fund investments are also needed to expand and its species are so single.7. The legal liability system is not perfect, the lack of civil liability provisions, which is difficult to achieve a comprehensive maintenance of the interests of investors. These problems are put forward to pave the way for perfect suggestions.The third chapter mainly introduces the USA, Britain and Taiwan area of our country legal system which is relatively mature. And American efficiency regulation spirit provides a guideline for the design of China’s macro regulatory framework. Our country should also study the America comprehensive exemption system. The typical pattern of self-regulation in England gives us a great inspiration.Provisions relating to funds resale in Taiwan area of our country has prevented the market risk effectively and fully active in the capital markets. In conclusion, the author study the good experience from the countries and regions of the regulatory system, and strongly urge the relevant legislation in our country to learn this experience.The fourth chapter is the core part of this thesis. The author seriously analyzed China regulation system construction and put forward some bold ideas from the micro and macro aspects to make the detailed rules. And all these suggestions are in order to provide some help for our country legislation and law enforcement.