Research On Legal Issues Of Self-regulation Of Private Equity Funds

With the private equity fund transactions become mature and the market has become increasingly stable,private equity funds favored by more and more investors.An ideal private equity market needs participation of the law.At present,administrative authorities of regulation and supervision of the People's Republic of China(PRC)issued lots of laws and regulations concerning private equity supervision,which change the legislative vacancy in private equity,and form the regulatory pattern of "one law,two regulations,seven measures,two guidelines,and multi-announcements" in private equity.China Securities Investment Fund Association issued the regulation of Administration Measures for the Information Disclosure of Private Equity Funds in February 4,2016,which makes up the lack of self-regulation of private equity funds in China at some certain extent.The formation of self-regulation supervision of the private equity fund depends on the improvement of information disclosure system.This article embarks from the basic concept and theory of the private equity funds,straightens up the legal concept and classification of private equity funds and summarizes three legal characteristics of self-discipline supervision: the non-public of information disclosure,flexibility of information disclosure,and the peculiarity of the self-discipline supervision.From the view of theory,the self-regulation of private equity fund needs to take the efficient value of economics into consideration,explore the necessary of information disclosure from incomplete information theory and malfunctioned information theory.Information disclosure is the key to provide effective information supply and to solve the market adverse selection in private equity.Self-supervision also needs to take fair of law into consideration.The value of fair of law and the value of order of law contained in information disclosure of private equity funds lay the base of its theory.The implementation of the value of fair of information disclosure of private equity fund depends on the fiduciary duty information disclosure,in return,is an important part of fiduciary duty.The value of order of law is more closely related to the information disclosure Information disclosure may increase stability of the private market,enhancing the transparency of private market,so as to form an orderly private market.In addition,this paper make policy suggestions based on analysis of current status and problems of private equity supervision.As for now,the regulatory organization has the problem of unclear positioning and lack of independence.In the field of equity investment also lack of national self-regulatory organizations.Based on the definition of self-regulatory supervision,this paper deduces the limitation of self-discipline supervision,and applies it to the present situation of self-regulatory supervision in our country,and then summarizes the problems of self-regulatory organization and the problem of information disclosure supervision.There are three reasons for the regulation of private equity funds: protection of investor,the completeness of the market and the stability of market.Through a brief review of regulatory policy of other countries,it is safe to say that protection of investor is the main direction of private equity fund reform.Investor is the starting point of supervision,also is the end.It is urgent to realize comprehensive protection to investors in our country.First of all,private equity funds shall be legal and institutionalized,private equity behavior that lack of regulations shall be put into the legal governance.Secondly,we should clear the legal nature of private equity funds,avoiding illegal fund-raising behavior.Then,strengthen the cost of illegal private behavior,and stipulate the corresponding civil liability and criminal liability in the law for the fraud,false information disclosure and so on.Last but not the least,establish a strict distinction system of investors.Through the above research,this paper put forward specific measures on information disclosure of private equity funds supervision,including establish the system of information disclosure,use the parallel model of compulsory information disclosure and voluntary information disclosure,clarify the difference between "open" and "closed" standard and so on.From the experience of developed countries,the rules of information disclosure come from self-discipline information on the stock exchange and then lead into the mandatory information disclosure under the law guidance.However,in our country,the information disclosure is first stipulated by mandatory law like the Securities Law,then transform into self-discipline organization.The information disclosure of private equity funds is voluntary.But there are many problems of self-regulation of private equity funds remain to be solved in China.Under this special circumstance,it is urgent and significant to conduct research on the legal problem of private self-regulation in private equity.