On The Improvement Of The Legal System For The Transfer Of Shares Of Private Equity Funds

Because of the rapid development of the private fund, the way that investors of private equity fund profit through IPO is blocked and other reasons. The investors who hold the share of the fund have to transfer his fund share. Private fund have recently been formally regulatory law, the provision of legislation on private fund share transfer is not comprehensive enough, only about transfer restriction. Investors are generally transfer the fund share through privately negotiation or other means. Unsound legislation system of private fund transfer reduces transaction efficiency, increase costs. It is necessary to normalize the private fund share transaction by improve the legislation in order to protect the rights and interests of the parties.The first chapter in this paper introduce the basic concepts of private fund, such as its concept, organizational form; what is private fund share, its performance, subject, category. This part also discusses the necessity of private fund share.The second chapter in this paper analysis the legislative status of the transfer of private fund. First of all, the related laws and department regulations about the deal in our country, summarize the restrictive provisions which identify the differences, and discusses the necessity. Secondly, this part introduces the current specific rules of private securities in US and the process of the found of the basis of legislation.The third chapter in this paper analysis the problems in our private fund legislation on the basis of the second chapter. Firstly, this part discuss the necessary of the restriction of investors number, the qualification requirements of investors are not uniform, the unreasonable restriction of transfer manner. Secondly, this part analysis the current trading places of private fund, and point out the issues that its orientation and disorder. Finally, this part analysis the current related disclosure of information, point out the lack of legislationof its subject, concept, and legal liability.The forth chapter in this paper proposed legislation recommendations on the basis of chapter three. First of all, I think institutional investors have enough wealth and expertise to take risks inherent in private fund, so legislation can lower the limit to raise the share of private fund liquidity; and the unity of qualified investors of private fund facilitate the particle operation, increase transfer opportunities. Secondly, the establishment of a standardized market place, by comparing the existing trading place( or platform), that “Inter Agency Private Fund Products, Pricing and Service System” as the main place for private fund share transfer, legislation should strengthen supervision on the deal completed in The Small and Medium Enterprise Share Transfer System and The Regional Equity Market in order to ensure their private attribute. Lastly, legislation should improve the regulatory system of private system. The trading counterpart ought to be the subject of the in information disclosure, the content limited on “the current publicly available information”, the one who misrepresentation should bear them in administrative and civil liability provisions. The fiduciary duties to constrain the behavior of the administrator of the fund should be like a trust contract the trustee same obligation due to private fund for restraint mechanisms are inadequate result in the rights and interests of investors can not be effectively guaranteed. In addition, accounting, legal, valuation, and other service agencies involved in the operation of private funds should also be subject to legal regulation.