Legal Research On The Protection Of Individual Investors’ Rights In Real Estate Investment Trusts

With the first REITs to be listed in China in June 2021,it is still less than two years since the establishment of an investor protection system.In order to establish an effective protection system,it is necessary to first define the nature of REITs,and the different nature determines the direction and measures for investor protection.Chapter 2explains the theoretical basis of investor protection in REITs,defines the boundary between investors in REITs and other investors,and the connotation of investor protection.The structure of China’s REITs is based on public funds and asset-backed securities,which determines the special status of their investors.An analysis of the reports disclosed by existing issued REITs shows that although individual investors account for very few of the total fund shares in REITs,they generally account for more than 99% of the total number of households.The special nature of the investor structure also means that special arrangements need to be made for the rights and interests of REITs investors.This report compares the protection of investors’ rights and interests in REITs with other types of investors such as real estate and general funds,and analyses the similarities and differences in the protection of the rights and interests of investors in different products,from which the need for protection of investors’ rights and interests in REITs and the significance of the study are proposed.The protection of investor rights of REITs is necessary.Its necessity is demonstrated through three aspects: First,from a macro perspective,the protection of the rights and interests of REITs investors is conducive to promoting the development of the capital market.The more important the investor protection,the larger the national capital market.Infrastructure involves people’s livelihood,every industry is closely related to people’s lives,and protecting the rights and interests of REITs investors is also protecting the stability of the capital market and even the market economy.Investor protection is also conducive to the efficient and rational allocation of resources.Secondly,fairness is the key and core in transactions,and ensuring investors’ rights and interests is also safeguarding the fairness of transactions,from the fairness of opportunity to process and fairness in form to substance.Third,handling the relationship between investors and institutions is conducive to improving the operational efficiency of REITs and promoting the benign development of the REITs market.At present,the legislative practice of protecting the rights and interests of investors in REITs in China presents the following outstanding characteristics: First,REITs are a new thing,special legislation lags,and the system is not perfect.Second,other departmental laws such as the Securities Law and the Securities Investment Fund Law cannot provide and cover the provisions required for investor protection of REITs,and they do not clarify the attributes of REITs,and even if a dispute arises,there is no way to start the application of the law.The sectoral laws are relatively independent and cannot be linked.After combing through the current legislative situation at the national and local levels,it is found that there are the following problems in the protection of the rights and interests of REITs investors in China:1.The rights and obligations of REITs participants are not clarified,and the rights and responsibilities are different;2.Failure to establish an appropriate system for investors,as well as insufficient possibilities and enthusiasm for investors to participate in management and supervision;3.The information disclosure system is not yet perfect,and there may be risks of illegal disclosure,deceive investors,and affect their analysis and judgment.In view of the above problems,the legal protection of REITs investors can be improved from the following aspects: First,special legislation on REITs should be formulated to raise the protection of investors to the legal level rather than departmental rules or local government rules.Only by clarifying the legal status and attributes of REITs can it be clear what kind of legal protection they are included in.Second,improve investor risk screening to ensure that investors can more easily participate in the major management of REITs.Third,eliminate the defects of information asymmetry through the information disclosure system,so that investors can more comprehensively and rationally judge and grasp the risks in their hands.Fourth,the litigation system can be put into practice,and at present,only courts in coastal areas have examples of securities class action lawsuits and representative litigation,which should be promoted and carried out in inland areas,and investors cannot be left without a way to sue.