Conflict Of Interest On Securities Investment Fund Manager Legal Regulation Of Trade

The securities investment fund is a kind of risk-proliferated aggregative securities investment mode. As an inevitable phenomenon in the operation of investment fund in securities, conflicts of interest bring about tremendous risks to the interest of investors. The legal regulation to conflicts of interest is the important content of securities investment fund law,In the first part this thesis dissertates the interest conflicts in securities investment fund as well as its legal regulation form. The thesis points out that the nature of conflicts of interest is the conflicts between the fiduciary's self-interest and the interest of principal in a given fiduciary relation. Securities investment fund is a typical kind of fiduciary relation, so its interest conflicts exist between the self-interest of fund manager as well as custodian who both act as fiduciaries and that of fund acting as principal. This kind of interest conflicts takes on the traits such as objectivity, the possibility of fund damage, complexity, diversity and concealment, etc. The management structure of investment fund can be classified as contracted fund and corporate fund.In the second part the thesis firstly discusses the root reason of interest conflicts in securities investment fund. The property rights structure of securities investment fund has a remarkable feature of the separation of ownership and management, which makes the fund a typical carrier of principal-agent relationship. The investors are the principals while the fund manager and custodian are agents. Principal-agent relationship contains internal conditions of the emergence of interest conflicts Secondly, the fundamental reason why the law regulates the conflicts of interest in securities investment fund is that the fund manager and custodian breach the duties of fiduciary based on their status in the legal relationship of fund. Conflicts of interest are the basic representation of violations of duty of fiduciary, and the final purpose of duty of fiduciary is to eliminate the latent of realistic conflicts of interest. According to the different backgrounds, there are three forms of conflicts of interest in securities investment fund: principal transaction, agency transaction and joint transaction.In the third part the thesis studies the legal regulation of conflicts of interest in securities investment fund. In the light of the forms of the interest conflicts, the first three sections of this chapter analyze the legal regulation of principal transaction, agency transaction and joint transaction in developed countries and regions, In discussion of the above issues, I searched and compared laws and regulations of countries of both common law system and continent law system, especially the practice and experiences of American mutual fund. According to the present development of Chinese securities market and legal system of fund, I made some suggestions with the aim of seeking settlement of such questions. Section four concludes there are two characteristics of the interest conflicts legal regulation: first, the regulation policy is forbidding the interest conflicts in principal as well as appropriate exemption. In view of the negative and positive influence of interest conflicts, most countries and regions prohibit it, and meanwhile make a difference to some of them. Second, the regulation measures combine the interior restriction with the exterior restraint. Considering the universality and complexity of conflicts of interest in fund along with the advantages and disadvantages of all kinds of means, only we take various measures can we gain satisfying regulation effect.In the forth part the thesis probes into the present situation and improvement of interest conflicts legal regulation in our country. The current laws regulates the conflicts of interest from the following nine aspects. For the protection of rights and interests of fund holders, I suggest the supervisory control system should be directed by the administrative authorities, oriented on the fund manager's inside control system as well as self-discipline, and supported by the supervisions of fund holders and fund settlers.The investment fund is still a quite new mode of investment in China, in which the regulation of fund managers' fiduciary duty is only one part. This thesis starts with the discussion of legal relations in the investment fund, aims at the building of investor protection system, analyses and explicates the obligations of fund managers, puts forward questions and discuss the methods to such questions with the expectations that can make some contributions to the development of securities legal system and market economy of China.