Securities Investment Fund Managers Trust Obligations

China's securities industry needs institutional investors for its development. Securities investment fund plays a very important role as one of these institutional investors in securities market. After five years' development ,the industry has got a lot of achievements ,but many problems also have emerged. "Inside story of fund" exposed the dark side of fund in China's market. Due to the lack of fiduciary duty, many fund managers can not meet the proper standard of competence and morality. This article on one hand discussed the fiduciary duty of securities investment fund managers and on the other hand put forward some advices to our present fund law to build a fiduciary-duty-centered investor protection mechanism .The article is divided into four parts. The first part is preface. In this part ,the author explains the meaning of research about fund managers' fiduciary duty .To compare and bridge the different rules about fiduciary duty in two legal systems, the author introduces the common principals of the law of trust. The author also briefly explains the content of fiduciary duty-duty of care and duty of loyalty.The second part includes chapter one and chapter two. This part begins with the discussion of fund managers' s legal status in chapter one, then analyzes the origin of fiduciary duty and further compares the duty of care and duty of loyalty which supplement each other.In chapter one , section one makes a comment on the legal status of fund manager, points out the deficiency of present theory. In section two, the author claims that fund manager should be one of the common trustees .Chapter two explores the origin of fiduciary duty. Section one indicates the fiduciary relationship between fund-holders and fund-managers. To avoid the abuse of this kind of relationship , the fiduciary duty is necessary in law to protect investors. In chapter two, theauthor finds that from the points of view of history and legal theory ,fiduciary duty is the extension and expansion of trustees' liability in the law of trust. The author also argues that it is necessary to replace the principal of good faith with fiduciary duty to be the foundation of the research in the law of fund.The third part of this article is composed of chapter three, four and five. In this part, the author compares the rules of fiduciary duty between two legal systems and puts forward some advices to our present law.Chapter three summarizes the legislation of fiduciary duty and probes into the relationship between duty of care and duty of loyalty.Chapter four makes a deep investigation into the duty of care .The author focuses on three questions: the definition, criterion and the requirements of the duty of care. Section one explains the duty of care . Section two discusses the evolvement from prudent investor rule to portfolio theory. In section three , the author makes a comparison of specific requirements of duty of care in developed countries and regions and finds the deficiencies in our present law and advanced some remedies.Chapter five researches the duty of loyalty in three aspects: explanation, regulation on self-dealing and no-profit rule. Section one explains the duty of loyalty. Section two discusses the regulation on self-dealing and gives some suggestions about self-dealing in present fund law. Section three discusses how to restrict simultaneous dealing according to no-profit rule.The last part is conclusion. The author emphasizes again that the fund law should be built on the basis of fiduciary duty to achieve the goals of protecting ordinary investors.