On The Trust Trustee’s Duty Of Prudent Investment

The duty of prudent investment of trust trustees not only reflects the modern trust system’s protection of trust trustees and trust beneficiaries,but also reflects the trust system’s balance between the efficiency value and the safety value of the law.The discussion on the standard of prudent investment obligation of trust trustee has always been a hot topic in the trust circle,and it is also a very important proposition in modern trust law,as well as a big problem.The standard of prudent investment obligation of the trust trustee is directly related to whether the behavior of the trust trustee handling and investing the trust property is legitimate.At the same time,this standard is also an important basis for investigating the trust trustee to bear the compensation responsibility for the property loss when the trust property losses occur.If the stipulation of the prudent investment obligation of the trust trustee is too principled and lacking in operability,it will certainly curb the innovation enthusiasm of the trust trustee in investing trust property,and even lead to the abuse of the right of the trust trustee in investing trust property,damaging the interests of the trust beneficiary and the trust trustee.In common law countries,especially the United States,the rules of the fiduciary prudent investment obligation have been relatively mature both in design and practical application,which has also become one of the important cornerstones of the rapidly developing American trust industry.Although the civil law countries and regions have introduced the fiduciary system one after another in order to develop the investment diversity and international standards,the general provisions on the fiduciary’s prudent investment obligation are too general and too principled,which is difficult to play its due role in judicial practice.The civil law of our country is mainly based on the study of Germany,Japan and other continental law countries.However,although the trust legislation is backward as Germany and Japan at present.Learning advanced and mature British and American trusts in trust legislation,we can overtake traditional civil law countries in the trust system.In order to introduce trust system,our country has promulgated the trust Law of the People’s Republic of China and other relevant management methods.In the Trust Law of the People’s Republic of China,the definition and judgment of the trustee’s obligation to invest prudently are also stipulated in Article 25 of the Law,which requires the trustee to manage the trust affairs prudently and effectively.At the same time,the Trust Law of the People’s Republic of China also stipulates that the trust trustee has the obligation to handle the trust affairs in person,but under certain circumstances the trustee has the right to delegate and is responsible for the matter.In addition to the Trust Law of the People’s Republic of China,Article 24 of the Measures for the Administration of Trust Companies and Article 4 of the Measures for the Administration of the Trust Plan for the pooled Funds of trust companies also mention that trust companies have the obligation of prudent investment for the investment of trust properties.But these laws and regulations without exception have not made clear provisions on the specific standards of the trust trustee’s prudent investment obligation.Such a situation cannot effectively constrain the investment behavior of trust trustees,which is not conducive to protecting the interests of the trustor and the trust beneficiary.At the same time,this situation itself is also unfavorable to the development of the trust industry.There is no perfect standard for the duty of prudent investment of trust trustees,and it is impossible to judge whether the trust trustees have fulfilled their due duty of care.It can not guide the investment behavior of the trust trustee.In judicial practice,the legal provisions on the obligation of prudent investment of trust trustees are an important basis for judging whether the trust trustees reasonably handle trust affairs,and also an important content for resolving disputes between trust parties.Therefore,it is very necessary to find successful experience and practice to perfect the prudent investment obligation of trust trustees in time and fill the legal loopholes in this field.Our trust is transplanted from the Anglo-American trust,so the more advanced concept of trust in the common law countries,and the construction of the more reasonable trust care obligation system,is worth learning and studying.Based on the imperfect design of the rules of the duty of prudent investment of the trust trustee,Chinese trust can refer to the trust systems of Britain and America,and start from the aspects of establishing the judgment criteria of the duty of prudent investment of the trust trustee,regulating the identification of the civil liability of the duty of prudent investment of the trust trustee,to protect the trust beneficiary and restrict the trust trustee to some extent.At the same time,for the healthier development of the trust industry,the protection of the trust trustee is also indispensable.The exemption clause of the prudent investment obligation of the trust trustee can not only serve as the professional norm and guidance for the trust trustee,but also embody the spirit of fairness in the trust law.