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Research On The Supervision Of Private Placement Of The Private Equity Fund In China

Posted on:2015-05-16Degree:MasterType:Thesis
Country:ChinaCandidate:X Y HuFull Text:PDF
GTID:2309330467458670Subject:Economic Law
Abstract/Summary:PDF Full Text Request
With the vigorous development of the private equity fund (hereinafter referred to as"PE"), a series of problems also emerged, of which the most severe one is the illegalfund-raisings. The illegal fund-raisings harm the interests of the investors, disrupt thestability of the financial markets, and even threaten social stability and harmony. Tosolve this problem completely, the government should strengthen the supervision of PE.The author believes that, the placement of the PE is the first and key issue of supervision,because the placement supervision is the first hurdle for the PE. By make appropriaterules, the illegal funds can be prevented effectively, and the investors and fund managerswho are not qualified can be prevented from participating in the PE activities. In theory,the government regulation is aimed to achieve market fairness and justice, to maximizethe transaction efficiency, and to achieve the optimal allocation of social resources. Thefirst step of the supervision of PE in developed counties is to limit the placement of PE.In this paper, the author tries to illustrate the supervision history and current status ofPE in USA and China, analysis the problems occur in the PE supervision, by learning theexperience of the USA PE supervision, and explore the reform proposals to the PEplacement regulation. In the author’s opinion, we should accelerate the development ofthe PE legislation, further improve the distribution of regulation power among thegovernment departments, more importantly, to establish a threshold for the qualifiedinvestors and fund managers, and actively respond to the challenges incurred by theinternet finance. The main content of this paper is divided into five parts as follows: In the first chapter, the author raised the difficulties and risks occurred during thedevelopment of the PE, of which the most significant risk is the illegal fund-raising. Thischapter analyses the reasons for the PE to fall into the illegal fund-raising. The mosttypical illegal fund-raising problems took place in Tianjin. As of2012, there are morethan a dozen funds under investigation among two thousands PE in Tianjin, with a capitalamount involved up to RMB100billion and the number of victims up to millions ofpeople.In the second chapter, the author first gives an overview of PE by introducing theconcept and the characteristic respectively, and further introduces the principle whichshould be established for the PE regulation. The author believes that, when comes intothe discussion of the philosophy which should be held by the government with respect tothe PE regulation, on the one hand, the PE should be given its own development space, toimprove the competitiveness of the financial sector, and to promote the financialindustry’s prosperity, so the government should not hinder its development; on the otherhand, the PE should be prevented from producing the negative externalities and the thesystemic risk to the society, which will turn out to damage the security of the market. Sothe principles of investor protection and avoidance of systemic risk should be established.In the third chapter, the author introduces the regulation of the private placement ofthe PE. The development and regulation of PE in US are comparatively mature, fromwhich we can learn some experience. Firstly, this chapter introduced the change of USopinions to PE supervision. Secondly, the author explained the PE legal history of US,starting from the Securities Act of1933and Securities Exchange Act of1934, to theDodd Frank act of2008, and the most recent JOBS Act. This chapter focused on fouraspects, government authorities of PE supervision, self-discipline mechanism, qualifiedinvestors threshold and the registration supervision of the advisers.In the fourth chapter, the author focused on the historic and current status of PEsupervision in China, and the existing problems in the supervision system. For theregulatory status, this paper discusses from three perspectives, the regulatory authority,regulatory objects and private placement. Firstly, regulatory authority includes a transferof regulatory power of the PE, from the NDRC to the CSRC; and the author alsointroduced the self-discipline mechanism and the development of fund mandatory filing in China. Secondly, the regulatory objects include the qualified investors and fundmanager. Thirdly, the author also illustrate the private placement of PE in China. Withthe understanding of the regulatory status of the PE, the author further analyzed theproblems in the supervision system.In the fifth chapter, the author proposed the suggestion to the regulatory reform of thePE. First, the government shall launch the unified legislation of the PE; second, thegovernment shall improve the power distribution of the PE supervision among thegovernment authorities; third, the government shall establish the system of qualifiedinvestors and the threshold of the fund manager; fourth, under the background of therapid development of internet finance, the government shall actively respond to thechallenges to the PE imposed by the internet finance.
Keywords/Search Tags:Private Equity Fund, Private Placement Supervision, Illegal Fund-raising, American Reference, System Reconstruction
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