Research On The Remedies For The Investors Of A Multi-Level Nested PE

Private equity is a kind of asset management product which is widely used in financial investment.In 2006,Partnership Enterprise Law was revised and officially established by National People's Congress.Since then,limited partnership private equity,as an “imported product”,has been rapidly adopted by investors and financial institutions in the field of risk investment,and has gradually become the mainstream form of private equity fund.Recent years have witnessed the continuous development of the financial market in China.However,there are also some outstanding problems come up with the expansion of new assets management products,such as substandard development,multi-level nesting,rigid payment,evasion of financial regulation and macro-management in certain businesses.It should be well noted that innovation is always accompanied by risks.Taking the multi-level nested PE product as an example,many financial institutions are taking advantage of it to diversify their funding,expand the scale of raising and evade from the restrictions of qualified investors.In order to stop the financial market from sliding into chaos and to prevent systematic financial risks,PE regulators have been focusing on issues of asset management business,such as multi-level nesting,with the principle of penetration.Take laws and regulations regarding private equity which promulgated in recent years as an example,Provisional Measures on Supervision and Administration of Privately-offered Investment Funds,which was promulgated on 21 August 2014 by China Securities Regulatory Commission,explicitly restricts private funds to expand the number of investors by using a multi-level organization structure,the privatelyoffered fund manager or the privately-offered fund seller shall examine whether the ultimate investor is a qualified investor,and compute the number of investors.In 2018,People's Bank of China,China Securities Regulatory Commission,State Administration of Foreign Exchange jointly issued the Guiding Opinions on Regulating Asset Management Business of Financial Institutions,which focuses on setting regulatory standards for the multi-level nesting and other issues.Although standers and principles have been established,declared and emphasized many times by rules and regulations as mentioned above,there is still a certain vacuum in the supervision of multi-level nested asset management products.It can be predicted that more and more assets management products may be adversely affected when facing the downward pressure,with private equity fund being no exception.Besides,the profit-seeking nature of capital will also drive it to constantly seek a breakthrough in supervision.Multi-game between financial investors,financial institutions and regulators will still be the eternal theme of the capital market.From the statistical data the writer collected,there are few cases that PE investors successfully safeguard their legitimate rights and interests through litigation.On the one hand,the investment contract of privately-offered fund itself is not so complete and concrete,which makes it difficult for investors to safeguard their rights through the internal path of the fund.On the other hand,due to the lack of judicial interpretation and typical guiding cases issued by Supreme People's Court,the court often takes a cautious and conservative attitude when handling fund investment cases,which makes it difficult to bring the protection mechanism established by the partnership law and other relevant rules into force.The core issue of this paper is to discuss the effective relief way of private investors of multi-level nested PE.The first chapter first introduces the definition,characteristics and development status of multi-layer nested PE which takes a limited partnership structure.The second chapter analyzes the particularity of multi-level nested PE and the difficulties of its investor protection based on the classic case of private investment in recent years-Shanghai Jin Xin fund investing MP & Silva,as well as the author's own practical experience.In the third and fourth chapter,aiming at solving the dilemma of investor protection,this paper discussed how to penetrate the nesting structure and investigate the legal responsibility of the derelict manager.The biggest innovation point of this paper is trying to find a feasible path for investors to protect their own interest on the basis of Article 68 and Article 80 of the Partnership Enterprise Law...