Civil Law Analysis On Assets Management Litigations Of Financial Institutions

Since 2012,the Securities Investment Fund Law granting securities companies the qualifications for asset management business,after that many kinds of financial institutions launched their own asset management businesses and issuing various types of asset management products,which marks asset management in China has entered the era of mixed operations.However,the supervision mode of asset management business is still separate supervision.Under the separate supervision system,the regulatory authorities adopt different standards for the asset management business operated by different financial institutions,which leads various problems in asset management field.In order to improve this situation,in April 2018,the People's Bank of China,the China Banking Regulatory Commission,the China Securities Regulatory Commission and the State Administration of Foreign Exchange jointly issued the Guiding Opinions on Regulating Asset Management Business of Financial Institutions,which marks the unified regulation of asset management products issued by different financial institutions.What's more,the document stipulated some key issues such as the concept of management asset business and the regulatory principles.Although the Guiding Opinions on Regulating Asset Management Business of Financial Institutions plays an important role in the unified supervision of the asset management market,we should recognize that the foundation of the asset management business is the agreement between two parties and not only the financial regulation but also the civil and commercial law are critical to the steady and orderly development of asset management business.The distribution of rights and obligationsamong parties and administrative supervision in financial field are based on different logic and benefit measurement method.Once the market risk of asset management outbreak,the adverse consequences will be transacted among the parties of the contract.At that time,the supervision document does not provide a direct basis.It is necessary to jump out of the regulatory rules and review the rights and obligations of all parties from the prospective of civil and commercial law.Therefore,although the Guiding Opinions on Regulating Asset Management Business of Financial Institutions plays an important role in the operation of the asset management market,we still need to analyze some important civil issues of asset management business.The first question studied in this thesis is the legal nature of the asset management business of financial institutions,which means the legal relationship formed by the client and the entrusted financial institution on asset management matters.According to functions of the financial institution,the asset management business can be divided into active asset management business and channelized management business.This thesis analyze the business models of various active asset management products and finds that the despite the fact that current mainstream asset management product are issued by different financial institutions and regulated by different investment standards,they are very similar in terms of legal structure,and they can be classified into the same legal relationship.Through the study of the principle of trust law and the interpretation of Article 2 of China Trust Law,we can know that in the practice of asset management,the rights and obligations between the clients and the trusted financial institution,especially some characteristics such as the ownership of property,the name of foreign acts,the isolation of target property,are consistent to the basic rules of the trust system and Article 2 of the Trust Law of China,so the active asset management business of financial institutions should be defined as the trust relationship.As for the channelized asset management business,there are two viewpoints about its nature in the academic circle: the agency in fact and the passive trust.The difference between the two viewpoints is whether a trust can be established when the trustee does not manage the entrusted property actively and only undertakes transactional work.Through the study of origin and development of trust,this thesis finds that in recent years,the trust in which settler has strong control over the trust property and the trustee is instrumentalized can be recognized as an institutional tool that returns its original function under the agreement between twoparties.In addition,it will bring more advantages to identify the channelized asset management business as trust relationship.Therefore,this thesis tends to identify the channelized asset management business as a passive trust.The second issue studied in this thesis is the validity of asset management agreements.The agreement records the arrangements of the civil rights and obligations between the client and the financial institution,which embodies the autonomy of the parties.The validity of agreement is critical to the realization of those arrangement.In practice,the most common problem about the validity of the asset management agreement is that some agreement clauses violate the relevant regulatory rules or the parties to the contract deliberately evade supervision by agreement.Most of the regulatory rules are departmental regulations,and the level of which does not meet the requirements of the Article 52,Item 5 of the Contract Law.As the lifeblood of the national economic,any instability in financial market may have a chain reaction and cause a huge impact on the economy and society.At present,China is in a special historical period,and financial security has been given an unprecedented important position.In such a complicated environment,how to determine the validity of such contracts and how to deal with the relationship between administrative supervision and judicial trials,not only relate the realization of the agreement and the protection of contractual interests,but also relate the stable operation of the financial market.Based on the judgment of the court,this thesis finds that under the background of strict financial supervision,the attitude of judicial judgment about how to determine the validity of financial contracts that violate the regulatory rules has changed greatly.For financial contracts that violate the regulatory rules,in the past,the courts generally strictly abide the level limit from Article 52,Item 5 of the Contract Law and relevant judicial interpretations to make it valid.However,this referee standard changed on August 18,2017,after the Supreme People's Court issued the Several Opinions on Strengthening Financial Trial Work.From the attitude the Supreme People's Court showed in the recent judgement,we can see that the court presented two characteristics in trial of the illegal financial contract:(1)the regulatory rules and the trial rules tend to be consistent;(2)the departmental rules whose level of effectiveness lower than laws and administrative regulations have become the new source of law for negating the validity of contracts via the clause of public interest.This thesis believes that this kind of referee should be evaluated from two aspects.First,It's too inflexible for Article 52,Item 5 of the Contract Law to the determines the influence of normative documents on the contract validity by legal hierarchy.There are a large number of regulations in China to regulate civil and commercial activities.Although these regulations are relatively low in legal hierarchy,completely ignore the existence of these regulations is not in line with their legislative purposes and is not conducive to the smooth operation of the social economy.In particular,considering the current economic situation and the core position of financial security in the operation of the national economy,it's reasonable for the court to invalidated the contract in violation of the public interest and make it a channel between the regulatory rules and the validity of the contract.However,there are some problems with this kind of refereeing.Under the background of the overlapping of regulatory rules and trial rules,public interest rules may be abused and become a convenient channel to negate the validity of contracts,which will cause the public interest clause lose its cautious and restraint in civil or commercial trials,and resulting in the channelization of the public interest clause.From the prospective of the balance between autonomy and financial security,this thesis proposes some strategies to improve the determination method of the validity of financial contracts in violation supervision rules.The strategies focus on the exploration of regulatory purposes and the framework of proportionality principles,aims at balancing the financial security and contract freedom in a specific case with the proportionality principles and maintains the caution and restraint in negating the validity of financial contracts in violation supervision rules to achieve a balance between financial security and autonomy of parties.