The Study On The Perfection Of Corporate Bond Trustee Management System In China

Bond financing is an important way of corporate financing.The prosperity of bond market cannot be separated from bond management and bond holder protection.As a basic system of bond holder protection,bond trustee management system plays a vital role in the prosperity and development of bond market.Since the government broke the rigid payment,bond defaults have become normal.Bondholders are not only faced with the loss of principal and interest that may result from a bond default,but also with the money and time cost of product redemption.China's bond trustee management system started late,the theoretical system is not mature.The bond trustee is in a negative position.Due to the influence of legal system,market environment,traditional concepts and other factors,the function of bond trustee is limited and cannot effectively protect the interests of investors.Based on the current situation of bond default in China and the demand of existing judicial practice,and based on the analysis of the basic theory of bond trustee and related practices abroad,this paper explores the construction and improvement path of China's corporate bond trustee system,which is of great significance to the prosperity and development of bond investors and bond market.The structure of this article is divided into four chapters,the main contents are as follows:The first chapter discusses the basic connotation of the fiduciary management system,including the basis,purpose and responsibility of fiduciary management relationship.The first chapter points out that although the bond trustee management system originates from the traditional trust,it is different from the traditional trust.The purpose of the system is to protect the interests of a large number of scattered investors,so as to establish efficient and sound market-based bond financing channels.In addition,the role of a bond trustee is to maximise recovery for bondholders,not just to protect existing value The role of a bond trustee is to maximise recovery for bondholders,not just to protect existing value.This responsibility is similar to that of corporate trustees.The responsibility of corporate trustees(i.e.,directors and officers)is to maximize shareholder value.Chapter one then discusses the institutional value of the fiduciary management system and the conditions for its realization.The system value includes: the specialized protection function,the organization protection function,the bond issuer and the holder's communication link.The conditions for the realization of the system value are as follows: the principal body of the trustee is suitable,the responsibility of the trustee is clear,and the trustee can play its subjective initiative.The second chapter describes that in the event of a bond default,bondholders would not only bear the loss of principal and interest,but also pay the cost of time.Then discusses the current situation of our country's bond trustee management system.Chapter two points out that in the case of bond default,the bond trustee does not stand on the side of the bondholders,or even on the opposite side of the bondholders,which makes the purpose of our country's bond trustee system frustrated.Then it discusses the problems existing in the implementation of the current bond trustee management system in China,mainly including: First,many trustees are not motivated to perform their duties.Second,there are some obstacles for the trustee to perform his duties;The third is the lack of trust in the bond trustee.First,many trustees are not motivated to perform their duties.This chapter also analyzes the reasons for the absence of the function of the bond trustee management system: firstly,the role of the trustee is unclear;Secondly,there is interest conflict between bond trustee and bond holder;Thirdly,the supervision and accountability mechanism is not perfect.The first section of third part briefly introduces characteristics of bond fiduciary management systems in the United States,United Kingdom,Japan.Section two summarizes the advanced management system of bond trustee of relevant countries outside the region from the aspects of whether it is mandatory to employ bond trustee,the role of bond trustee,the distribution of rights and obligations of bond trustee,and the resolution of conflicts of interest.Mandatory appointment of bond trustees for public issuance of corporate bonds is a common practice around the world.And the trustee can not arbitrarily resign.In common law countries,bond fiduciary management relationship is based on trust.Civil law countries also pay more and more attention to the role of bond trustee.There are three kinds of rights of bond trustees in different countries: the right to investigate the issuer,the right to handle affairs in emergency,and the right to claim the remuneration of the issuer.The obligations of the trustee are divided into the obligations of bond management before default,the obligations of notification of default and the obligations of actively safeguarding the interests of bondholders after default.The main ways to resolve the conflict of interest are: the trustee resigns voluntarily;The trustee actively eliminates the conflict of interest and continues to serve as the trustee with the consent of the bondholders;Appointting an additional trustee or applying for a new trustee by the holder.The fourth chapter puts forward some institutional Suggestions on our country's bond trustee management system.In order that the bond trustee take the initiative to perform the responsibility of bond trustee management and better protect the interests of bondholders,the author suggests that the relationship among issuers,bondholders and trustees should be defined as a trust.Fiduciary duty is introduced and the criterion of it is "prudent person".In order to better play the subjective initiative of the trustee,balance the allocation of rights and obligations of the trustee,and improve the incentive mechanism,it is suggested to apply the fiduciary duty standard of directors in the company law to the trustee,so as to increase the autonomy of the trustee.As for the conflict of interest,the cut-off point is the bond default.If there is a conflict of interest after the bond default,the trustee must take the initiative to eliminate the conflict of interest within the prescribed time.In addition,we should refine the qualifications of the trustee and explore the establishment of a credible third-party trustee management institution,so as to avoid the occurrence of interest conflicts as far as possible in the initial selection.It is also necessary to strengthen the supervision of the trustee,tighten the system of entrusted management report,and improve the internal management.The underwriting department should be strictly separated from the management department of the trustee,so as to maintain the neutrality of the trustee and ensure its rational bond management affairs.