Research On Legal Regulation Of Fund Industry "Rat Trading"

The public offerings and the private equity funds have become the key attention of the financial markets since the fund market kicked off. For investors, fund market has brought huge benefits, but "rat trading" scandal also frequently exposed in the newspapers and internet and it always brought irreparable losses. "Rat trading" behavior in recent years appeared some new trends. In the face of new problems and new situations, the existing legal regulations are in awkward predicament. Therefore, the study of this paper not only reflects its value and significance, and also provides some reference to legal regulation and judicial practice to guarantee the healthy and orderly development fund industry. The rat behaviors of fund industry are summarized firstly, including discussing its meaning, characteristics, legal qualitative and the necessity of legal regulation. Then through the research on the mature legal system, this paper analyzes the useful experience of foreign countries which includes the legal regulation system, mechanism of punishment, the regulatory model of checks and balances etc. those are good references to China’s legal regulation of rat behavior. Based on the "rat trading" legal regulation of our country’s present situation and deficiency, digging into our country in the "rat trading" legal regulation problems, this paper focus on innovation of China’s fund industry legal regulation——to provide some valuable references for the legal regulation of the "rat trading" behavior.For the legal regulation of "rat behavior" in fund industry, this article expounds from three aspects:Firstly, we should perfect legal regulation of the rat behavior. The responsibility body should be determined and the legal relationship of trust should be a clear definition. Determining the responsibility body and defining the legal relationship of trust not only conforms to the general international practices, but also conforms to the operation of the judicial practice. Secondly, we should perfect the relevant legal responsibility mechanism by strengthening the intensity of criminal and administrative penalties, increasing the cost of illegal rat behavior, clearing the subjects of civil liability the responsibility principle, and improving the accountability mechanism of civil compensation and so on. Thirdly, we should improve the mechanism of supervision. The internal supervision and external supervision should be an omni-directional supervision system. The supervision system should exert its warning and deterrent function so that we can reduce the number of the behavior of "rat trading" and take preventive measures to keep away the behavior of "rat trading".