Trustee Responsibility Analysis Of Channel Trust

In 2018,with the promulgation of the New Rules on Assets Management,the assets management business of our country has entered into an era of unified supervision from separate supervision,and channel business has strongly regulated as a result.But it does not specify the specific obligations and responsibilities that channel subjects shall assume.Under the concept of paralleling administrative supervision and justice,the Supreme People’s Court("SPC")issued the Minutes of the National Civil and Commercial Trial Work Meeting of Courts in November 2019,which also provides guidelines for the adjudication of cases involving channel business,but evades the issue of disputes over the liability of channel subjects.Based on this background,this paper defines the concept of channel trust,draws two major disputes of the trustee’s liability in channel trust,and draws conclusions after detailed analysis of the above case disputes.At the same time,in the process of in-depth analysis,the nature of the problems is found,so this paper gives corresponding recommendations for improvement on the basis of useful experience at home and abroad.It is divided into five parts:The first part defines the channel trust discussed in this paper and points out its particularity,which is the scope of the following cases.Then,by comparing and analyzing the structure design of channel trust in the case,the common basic structure of channel trust is extracted,that is,trust-settlor-party-led and third-party-led(as an example of investment advisor)channel trust.Combined with the typical cases,two major controversies about the fiduciary liability under different structures are pointed out,namely,controversies about the basic legal relationship and the validity of the exemption clauses.The second part is to analyze the disputes on the determination of the basic legal relationship of channel trust.Among them,the "Entrustment Theory" is found based on the similar characteristics of trust,and do not grasp the nature of trust-the independence of trust property.For the "Trust Theory",there are also three viewpoints on the effectiveness of channel trust in practice and academia,which are Affirmation,Negation,and Differentiation respectively.After analyzing the above viewpoints one by one,it is found that the root of the controversy lies in that the stipulation of statutory trust type in the Trust Law is not clear enough and the development of trust practice is not responded in time.As long as these innovations are not away from the essence of trust,the independence of trust property can be realized above the minimum extent,that is,the trust legal relationship should be recognized,and the validity of the trust should be judged within the scope of the trust law based on that.Based on the above conclusions,the disputes over the validity of the clauses regarding the exemption of the trustee’s liability in channel trusts may be analyzed within the scope of the trust law.This dispute mainly focuses on two aspects of the obligations of channel trustee: the duty of care and the duty of personal management.With respect to the former,the root of the dispute lies in that none of specific provisions on the duty of care has provided on the trust laws and regulations in our country.By contrasting and analyzing the duty of care of the trustee in general trust and business trust,this paper believes that due to channel trust is a type of business trust,channel trustee shall accept a higher degree of duty of care in theory of law and shall not reduce or remit such duty at will;the duty of care shall be performed concomitantly with the performance of other duties and obligations by the trustee.Therefore,the duty of care of the trustee of channel trusts shall be performed on the basis of the performance of other duties and obligations and the criteria for performance of the duty of care shall be higher.With respect to the latter,through the analysis on the legality and reasonableness of the articles on the exemption or reduction of the responsibility for personal management,this paper believes that the re-entrustment liabilities of the trustees of channel trusts may be exempted to different extents according to different structures.The problem,however,is that the provisions on strict liability of trust trustees when re-entrusting cannot adapt to the development of the trust practice of our country,and therefore are often avoided in application.Above three problems of disputes,this paper fourth part mainly carries on the domestic and foreign comparison for reference to seek beneficial experience.This paper studies the jurisprudence and practice basis of passive trust in Japan,the standard of the duty of care of the trustee in Taiwan of China,the situation and responsibility of the trustee in Japan,and the structure of the Special Money Trust in Japan’s trust practice.On the basis of the foregoing comparative reference of domestic and foreign legislative and practical experiences,the suggestions for three major issues concerning the responsibilities of channel trustees are put forward in fifth part: pulsing statutory trust types,and standardizing passive trusts which meet certain criteria into statutory trusts;formulating behavior standards for the duty of care of trustees by using the methods of "positive general norms + negative enumeration" for the premise that the obligations of trustees are specified;differentiating the circumstances and liabilities for trustees’ re-entrustment according to different structures,and taking the structural design of the Special Money Trusts for reference.Channel trust is the pain of the development of trust business in our country.These suggestions are not only helpful to solve the disputes of the liability of the trustee of channel trust,but also can be widely applied to other types of business trust and help the development of business trust in our country.