On The Prudent Investment Obligation Of The Trustee In China

The modern trust system originated from the U.K.land use benefit system and is an important system creation in the Common Law countries.The trust system takes equity as its historical origin and dual ownership of trust property as its core element.It has the system advantages of separating risks and managing financial affairs by dedicated personnel,and occupies an important position in European and American legal systems.At present,China’s trust industry is undergoing a process of development from nothing.In 2001,China officially promulgated the first " Trust Law".At the same time,with the high-quality development of China’ s economy and society,the society’ s need for trust investment is also increasing.The more urgent it is,the more widespread attention it has aroused at the national level.In 2020,the "Interim Measures for the Management of Funds and Trusts of Trust Companies"(the latest draft for comments)will be promulgated,and the General Office of the National Development and Reform Commission will issue the "Regarding Real Estate Investment Trust in the Infrastructure The "Notice on the Application of Funds(REITs)Pilot Projects" has promoted the development of the trust business from the legal level.Whether the trust industry can develop healthily and whether the interests of the trustor can be effectively protected,the key lies in whether the trustee can exercise prudent investment obligations.Although China’s current law has provisions on it,there are still flaws.Chinese academic circles have studied the duty of trustees to invest with caution,but they are not in-depth enough.This article intends to adopt literature analysis method,comparative analysis method,case analysis method and other research methods to conduct an in-depth discussion on this issue,in order to promote a further improvement of national legislation,attract the attention of academic circles to the study of this issue,and make investors’rights and interests effective in practice.Guarantee,prevent and defuse investment risks.and promote the healthy development of the trust industry.The trustee’s prudent investment obligation means that the trustee should perform its duties when making investment activities,and be prudent and reasonable at all times to realize the value-added of the trustee property.This provision is the core obligation of the trustee.It is of great significance to the entire trust system.It ensures the preservation and appreciation of the investor’s property,and the trustee reasonably controls investment risks and uses investment rights prudently.China’ s current laws on the trustee’ s prudent investment obligations are mainly reflected in Article 25 of the Trust Law and Article 24 of "the Administrative Measures for Trust Companies ",but the content is too general and principled,and the criteria for judging the trustee’ s prudent investment obligations,etc.There are shortcomings in the specific provisions of the problem,which makes it difficult to be operable in judicial practice.In view of the inadequacies in the legislation,the author combines relevant trust practices and reference to the useful experience of extraterritorial legal systems,and makes recommendations for the following aspects of the legal system of prudential investment obligations of trust trustees in our country.Rules and modern investment portfolio concepts,combined with China’ s national conditions,absorb them locally,and add a special chapter " Trustee’s Prudent Investment Obligation" on the basis of the existing " Trust Law”,that is,detailed provisions on specific content principles.Clarify the trustee’ s judgment standards for prudent investment,improve the rules for assuming responsibility when violating the prudent investment obligation,prevent trust trustees from abusing investment rights,reduce the impact of the settlor’s right of adjustment on the effectiveness of the prudent obligation,and ultimately better guide the trust practice and guide the trust High-quality and sustainable development of the industry.In short,we should adhere to the basic principles of China’ s trust law,absorb and draw on the useful experience of foreign law systems,and further improve the legal regulations on the trustee’ s prudent investment obligation,so as to better guide trust practices,strictly control investment risks,and protect the trustees and beneficiaries The legitimate rights and interests of the trust industry will promote the further healthy development of the trust industry and ultimately serve the country’ s real economy.