Company Funds And Contract Funds Research

Securities investment funds are divided into two main forms: Contractual fund and Corporate fund. They are different in governance structure. Contractual fund is focus on the external governance and corporate fund focus on internal governance.Effectiveness of external governance is required to give full play to improve the authority of the monitoring system and an open competitive market environment, and China did not possess the above-mentioned two conditions, leading to the contract funds to weaken the effectiveness of external governance. Weak external governance requirements, objectively speaking, the Fund's internal fund managers can be strong oversight and constraints.Compare Contractual fund from China to the United States corporate fund, we can see the comparison: there are many defects in the structure of internal governance structure of contractual funds- not a strong oversight checks and balances. The corporate fund, in the internal governance structure, has certain advantages, which through the introduction of the fund company' s board of directors, independent directors, such as system, the formation of a strong fund managers to monitor and restrict and reduce the risk of moral hazard of fund managers. In the internal governance structure, corporate funds have unparalleled advantages, in a word, corporate funds should be fully developed to protect interest of investors in our contrary.The final chapter is suggestion to carry out the design of the legislation of corporate fund in our contrary. Improvement of fund management structure is an important aspect of the legislation; it is the basis of the survival and development. At the same time, external system provides a good legislative environment, which guarantees the development of securities fund.