Legal Analysis On "Trust Investment"

On the basis of the theories of Law and Institutional Economy this paper makesin-depth analysis on trust investment acting as a legal case and points out several key legalproblems that concerns in lawsuits. Then it discusses some disputes about the financialsupervision on trust investment. This paper tries to make relatively comprehensive analysis on some basic theoreticalissues and some disputes in lawsuits of trust investment, such as the definition, category,and law character of trust investment, and the legal effect in the main clauses of typicaltrust investment. And it also makes research on the disclosure of and supervision on thetrust investment in listed company. It tentatively discusses what justice authority andjudges can do in financial supervision through demonstrative analysis on trust investmentjudge. This paper consists of five parts and adds up to 30,000 words. In the first part itbrings forward the summary of the basic theories, in the second and third parts it analysesseveral problems in the lawsuits, in the fourth and fifth parts it analyses some problems insupervision on trust investment. In the first part the summary of the basic theories points out the basic character andscope of trust investment from its definition and category. In the first section it makescomparison among four typical trust investment definitions and describes its character asthe category of trust asset clients, asset trustees, the trust asset object and marketorientation, the asset management category and profit guarantee etc. In the second sectionit categorizes trust investment into five standards: the contract title, fund entrusting party,fund entrusted party, fund collection ways and fund operation ways. And it tries to pointout the scope of trust investment more clearly so as to make certain that the key points ofthis paper lie in the character of "typical trust investment mode" and the effect of contractclause. In the second part it discusses the character of trust investment, which is the keypoint that draws disputes and it can also solve the relevant puzzles. On the basis of certaincharacter of trust investment, the respective rights and obligations in legal relationsbetween entrusting party and entrusted party can be determined, especially the obligationsof entrusted party. But obviously it is the blurriest part in legal relations. In this part thispaper makes comprehensive analysis on the character of trust investment in three aspects:to make certain what area trust investment can fit in legal relations; to make certain whomthe securities belong to in the possessing relations; to make certain the legal restriction ofthe relation between trust investment and the sold investment. In the third part it analyses the main characters and effects of contract clauses of trustinvestment. In the legal relations of trust investment the most significant Chinesecharacteristic trait is that in general the fund entrusted party promises the entrusting partythe profit guarantee in the asset management, which is embodied in the contract with twoclauses: one is the "bottom profit clause", the other is "mortgage stock clause". With thefirst clause the entrusted party promises the entrusting party a bottom profit commitmentin proportion or in amount. With the second clause the entrusted party makes guaranteefor the entrusting party with a certain amount of securities. In the disputes of trustinvestment contract, the effects of these two clauses are the focus of dispute for bothparties. In addition, there is a "tri-party supervision agreement", in which the securitiescompany acts as the third party supervisor. And the legal status of the securities companyis also a unclear legal issue,which is discussed in the third section of this part. In the fourth part it analyses the trust investment in listed company, in which thereare two key problems: firstly, for some big funds only with the resolution of board of...