Research On China's Corporate Bond Trustee System

In the corporate bond market,the trustee system is an important way to protect the interests of bondholders and is the core mechanism for implementing bond management.Its value lies in solving the higher degree of information asymmetry directly existing between bondholders and issuers.The lack of professional skills of bondholders,the small and more decentralized bondholders 'bond holdings,and insufficient contract protection in bond subscription agreements play a pivotal role in regulating the bond trustee industry.The fiduciary manager system under the Anglo-American law system is built on the legal foundation of its local trust law.As the nominal owner of the creditor 's rights,the fiduciary management has the right to take legal remedies on behalf of the bondholders in its own name without the bondholder 's consent It can take measures independently and has the advantage of efficiency;under the civil law system,the bondholder authorizes the trustee to take legal procedures,that is,the plaintiff 's eligibility for the trustee requires the bondholder 's authorization.The bondholder and the trustee The relationship is agency.Based on the system foundation and practice of China's civil law system,[Baidu Encyclopedia interprets the term "bond trustee" as "the bond trustee is an institution established in accordance with the debt trusteeship management agreement to protect the interests of bondholders.Bond trusteeship management The relationship between the person and the bond holder is a principal-agent relationship "] China 's related industries,especially the asset management industry,generally position the bond trustee as a principal-agent legal relationship.Judicial authorities also use the principal-agent relationship to determine facts.However,the main function of the bond trustee,that is,the suitability of the plaintiff to protect the rights and interests of bondholders through litigation,contradicts the provisions of the Civil Procedure Law,[Article 48 of the Civil Procedure Law provides that "citizens,legal persons and Other organizations can be parties to civil litigation.Legal persons are litigated by their legal representatives.Other organizations are litigated by their principals ”] Bondholder groups are clearly not legal persons,and if they are identified as“ other organizations ”,they are entrusted with management Whether or not a person becomes the main person in charge requires a resolution of the meeting of holders.Moreover,the “main person in charge” here is a natural person,and the trustee is a legal person.In this contradiction,regarding the issue of the eligibility of the plaintiffs of the trustee,the "Administrative Measures on Corporate Bond Issuance and Trading" stipulates that the trustee may accept the entrustment of the bondholder and bring the law on behalf of the bondholder program.This provision also adopts the practice of the common law system and the civil law system.It not only draws on the tradition of the trustee in the common law system to initiate legal procedures "in his own name",but also follows the agency relationship of the civil law system.The trustee needs the authorization of the bond holders when performing specific relief duties.Although the claims between the holders are independent,they can save judicial resources through joint litigation,[Article 52,Article 54 of the Civil Procedure Law of the People 's Republic of China]Paragraph 1 stipulates: "One party or both parties are more than two,and the subject of the litigation is common,or the subject of the litigation is of the same type,and the people's court believes that it can be tried jointly and approved by the parties.It is a joint litigation." ] This arrangement gives the trustee an independent litigation status on the basis of maintaining the principal-agent legal relationship and solves the problem of the agent ' s litigation status.However,due to the low level of legislation in the Administrative Measures,under the rules of the Civil Procedure Law Conflicts occurred until December 28,2019,and the right of the bond trustee to sue“in his own name”as prescribed by the revised “Securities Law” in the form of law was his formal direct legal basis for the qualification of the plaintiff ' s litigation subject.Only the authorization of the right holder is required in the procedure,and it can be sued as a legal person.This logic was responded to in the judicial documents of the Supreme Court,[Article 5 of the "Minutes of the National Court Trial of Bond Dispute Cases(Draft for Comment)" : "The Qualification of the Litigation Manager as the Subject of Litigation.The bond issuer cannot pay as promised When the principal and interest of the bond or the default event stipulated in the bond offering document occurs,the trustee shall,in accordance with the authorization of the bond offering document,the bond trusteeship management agreement or the resolution of the bondholders 'meeting,in its own name to the interests of all or part of the bondholders.If the people's court filed a lawsuit,applied for issuer reorganization,or bankruptcy liquidation,the people's court shall accept it according to law.The trustee shall submit to the people's court an authorization document that complies with the bond offer documents,bond trust management agreement,or bondholder meeting rules." ] Means that in future related cases,the trustee " prosecuting in his own name " will not be hindered by judicial trials.Therefore,the rule of " in his own name " is not incompatible with the Civil Procedure Law.However,the trustee system originated from the trust relationship under the Anglo-American legal system.The origin and positioning is that the trustee exercises duties and protects rights and interests in the name of the creditor.In the international community,countries use trust legal relations to construct the system structure of trustee managers,and less use of principal-agent legal relations.In the fiduciary manager system,a single holder grants the creditor's rights based on the bond to the fiduciary manager.The fiduciary manager,as the nominal owner,that is,the nominal creditor,has the right to exercise all the creditors' participation in bankruptcy reorganization in the relief of breach of contract,or The right to additional guarantees and judicial proceedings is required to maintain the interests of bondholders with large numbers and geographical dispersion in a more unified,efficient and convenient manner.China 's legislation restructures the fiduciary manager system through the principal-agent relationship,but in practice,the transplantation of the legal system without a similar legal system system environment often produces applicable disputes,such as conflicts of interest and litigation.Status issues,transaction mode issues,shallow consciousness of fiduciary duties,trustee qualifications are based on industry rather than professions,and behavior-related personnel's lack of responsibility to cooperate with obligations.This article starts from two aspects: the legal basis of the principal-agent system in the civil law system and the trust legal basis in the Anglo-American legal system of the fiduciary manager system.First,it analyzes the degree of agreement between the principal-agent relationship and the Chinese legal system.By drawing a relationship chart,it lists the advantages and disadvantages.Identify the loopholes in the system.At the same time,this article takes the existing corporate bond trustee system in China as a starting point.Under the background of the latest laws and regulations,it analyzes the legal basis and function of the trustee system,and proposes the existing laws and regulations.Under the fiduciary manager system,it also needs to have the legal basis and legal relationship background framework,and it can be used as a theoretical framework for the fiduciary manager system based on the trust law.The body of this article consists of four parts:The first part: start with the positioning of the system,clarify the risk of bond trading to the holder,through the trust management person in solving the information asymmetry,balance the issuer and the holder,and have the advantages of professional skills,propose the trust manager The necessity of existence,on this premise,through the introduction of legal documents to discuss the introduction and evolution of the system in China,from the rigid payment period is not valued,to the frequent defaults,the bond market is not good,and seriously endangers the stability of the capital market.China has incorporated the system into the Securities Law.For the first time,the trustee system has been incorporated into a system that protects bondholders from the legal level.It has given the trustee managers the qualifications to initiate litigation,property preservation,and participate in bankruptcy liquidation.The relevant documents of the ministries and commissions list innovative mechanisms such as the "Chinese version" class action and the hierarchical decision-making of the holders' meeting,detailing the legislative changes to the system of trustee managers.Part 2: Analyze the judicial position,theoretical position and practical position of China's fiduciary manager system,sum up the current status of the bond trustee system widely used in China's trust agency structure,and combine the roots of China's civil law system to pass the law The form of a relationship graph analyzes the institutional structure,analyzes its rationality and feasibility within a certain range,and at the same time takes the "11 super Japanese debt" and "15 five foreign debt" default cases as examples to clarify the loopholes in the system based on the theory,Analyze the shortcomings and actual risks of the institutional structure of entrusted agents,and put forward suggestions for further improvement,that is,the system design based on the trust law as the theoretical basis.The third part: on the premise of recognizing the broad applicability of the principal-agent theory,put forward the proposal of constructing the trustee manager system with the trust system to solve the conflict of interest arising from the property 's independent status and neutrality;The conflicts of interest arising from the overlapping status of“managers”advocated that professional rather than industry standards should be used to expand the scope of qualifications of fiduciary managers,allowing insurance,banking,trust and other industry institutions to act as fiduciary managers;The model of the system summarizes the superiority of the trust system and is logically consistent with the relevant laws and regulations.In terms of transaction mode,a firewall solution to resolve conflicts of interest is designed with trust as a framework,so that underwriters under the principal-agent relationship are independent.This article also lists people involved in market behaviors,such as regulatory agencies,rating agencies,guarantee agencies,judicial agencies,and securities registration and settlement agencies,by looking for provisions to list obligations for cooperation,and advocates that legislation should provide for liability for breach of obligations.It advocates that the fiduciary manager should bear the fiduciary duty of the fiduciary trust person to perform its duties with loyalty and prudence,and also advocates that the fiduciary manager should have a direct interest in the default bond through contract design,so as to meet the principle requirements of litigation law regarding the qualification of the subject Liability for breach of contract.This article advocates that civil liability should be used to replace administrative liability,clarify the boundary between civil and criminal liability,and provide clear punishment guidance to the trustee.Part ?: This article puts forward suggestions for improvement from both inside and outside the system.Within the system,it reaffirms the importance and feasibility based on the legal principles of trust law,and insists on the identity of holder,trustee,and issuer.Positioning is included in the framework of the trust law,or within the framework of the entrusted authorization,the internal division of the underwriters is separated,and the interest relationship between the trustee and the issuer is cut off;outside the system,it is advocated to improve the credit rating of the credit rating agency and establish a rating result Multi-repetitive audit system,or the average value of multiple ratings to improve the authenticity of the rating results,in addition,it is also necessary to improve the bond disclosure mechanism,in the context of supervision from the audit system to the registration system reform,the regulatory body proposed to the issuer More comprehensive information disclosure requirements,reduce the issuance conditions to avoid the issuer from disclosing false information in order to enter the market,and design more efficient and diversified information disclosure methods to reduce information asymmetry and allow market investors to act as information disclosure Auditor,let the market act as the verifier of information disclosure,and issue false information People will eventually be eliminated.Whether it is from the perspective of the actual role of the bond trustee,the improvement of the system,or the purpose of strengthening the protection of creditors in the severe environment of the frequent collapse of the bond market,it is necessary to clarify the existing series of problems of the bond trustee in our country,and Repositioning its role,designing a system for the purpose of representing the interests of creditors,detailing the fiduciary duties and obligations of bond trustees under the trust law structure,and solving the existing problems of the system,trying to manage the bonds The human system is properly integrated into the legal system of China ' s continental legal system,and it plays a practical role in protecting bondholders and promotes the construction of a country ruled by law in China 's social subject.