China's Open-end Fund Managers Rely On Volunteer Legal System

As a new means of capital market financing, Open-end security investment fund (open-end fund) can be purchased and redeemed by the investor. Characterized by stabilizing and promoting capital market, it has come to be a vital part of the financial system in our country. In the open-end fund institution, open-end fund need the fund managers operate and manage the fund assets with advanced knowledge and skills, so the fund manager is given the big right to pursue the best performance of the investment fund. Therefore, it is necessary to discuss the fiduciary duty of open-end fund managers to guarantee open-end fund managers utilize the suitable right to seek the biggest benefit for fund holders.The paper puts its emphases on the fiduciary duty of open-end fund managers. It is arranged as follows:The first part gives a general overview of open-end fund managers' fiduciary duty. Firstly, the part defines the concept of fiduciary duty. Then it compares the fiduciary duty and the duty as a trustee. Next, the article analyses the reason and the legal value of the fiduciary duty.The second part interprets the connotation of open-end fund managers' fiduciary duty. The part is the one of key part in the paper. Open-end fund managers' fiduciary duty includes the duty of care and the duty of loyalty. After a general summary of the care duty and the loyalty duty, the article analyses the essential purpose of open-end fund managers' care duty and loyalty duty. The duty of care prevents open-end fund managers from abusing authority. The duty of loyalty prohibits the transactions conflict of fund managers' interest and fund holders' interest. Then the focus point of this part is the concrete requirement of open-end fund managers' care duty and loyalty duty, especially the relating legal system of the U.S, England, Japan, Taiwan and so forth. The duty of care includes diversified requirement, liquidity requirement and risk requirement. The duty of loyalty contains loyalty duty of principal transaction, joint transaction, agent transaction, fund management fees.The third part focuses on the striking problems of open-end fund managers' fiduciary duty in our country's investment fund law. According to the systematic exploration of the connotation of open-end fund managers' fiduciary duty, the article analyses the present situation and striking problems of open-end fund managers' fiduciary duty in our country's investment fund law.The fourth part puts forward the suggestions for perfecting the legal system of open-end fund managers' fiduciary duty in our country. Following the above striking problems of open-end fund managers' fiduciary duty in our country, the article brings forth the legal countermeasures for the related systems. Firstly, the regulation of security investment fund generally prescribe that fund managers must bear the duty of care and the duty of loyalty in our country. Then the regulation of security investment fund draw up the material provision of the care duty and loyalty duty on the basis of generally provision.