The Legal Protection Of The Investors Of The Real Estate Investment Trusts

Real Estate Investment Trusts is an issue which is a benefit vouchers way to raise funds to the community and investment institutions, and is a trust system which is commissioned by the specialized agencies on management, and invested in real estate projects, and will give investors income proportional distribution. Investors'rights protection is the key to the development of the REITs. This paper,after clearing the legal relationship of REITs, by using the trust beneficiary theory and information economics principal-agent theory as the theoretical basis, combining with the risks which referencing the current legal system investors faced, and doing comparative study,tries to construct a legal framework of investor protection in REITs.Focused on establishing a system for protecting the rights of investors of REITs in China, this paper aims at doing some theoretical discussion to promote the establishment and development of rights protection mechanism for investors in REITs. Except the introduction and conclusion, there are four parts in this paper.In the first part, this paper introduces the definition, characteristics and the process of REITs briefly. Through analyzing the legal relationship of REITs, we can know legal status and necessity of investors ,and clear the necessity of right protection for investorsIn the second part, it firstly analyzes the trust beneficiary theory in trust law and information economics principal-agent theory as the theoretical basis of REITs. Secondly, it analyzes the real risks investors faced, including legal risk, policy risk, credit risk and market risk, we can build the basis of comprehensive and appropriate protection of investors'rights by combining the both aspects above.In the third part, firstly, it introduces the current legal systems and effective measures for investors'rights protection of REITs in other advanced countries. Then, it summaries the current trust law and other relevant regulations for investors'rights protection in China. Through the comparison, we can see the lack and inadequate of Chinese present legislation, which just are the important aspects we can make adjustments, alterations and strengthens in the future.In the fourth part, in order to protect investors'rights, author raises some legal recommendations from two aspects of internal management and external management, to realize comprehensive and appropriate protection of investors'rights by consummating the organization norms and business operational regulations, supporting tax system and the levels of supervision system.