By: Chen Huan
Compiler: Fund China

“Inquiry from the Private Fund since the second half of last year is the focus of our work. the near future there will be a series of work plans. “The Ministry of Public Security securities of a criminal investigation bureau of reporter said.

According to a Xinhua report, July 9, the Commission of the NPC Standing Committee and the State Council Legislative Affairs Office responsible person answering a reporter’s question, without the approval of the SFC, engaging in the securities investment fund raising and financial management of illegal business activities.

Before and after the glory that not long ago the stock market to “take the lead in Big Brother” has been Jilin police control.

Part of the fund already smell in the air tense atmosphere. “Indeed the recent investigation, the Fund will check and then check the brokerage firms, further investigation Private, Some Advice is also included. “A fund industry on the phone, told reporters.

Reporter also noted that the Private Fund judicial interpretation of the Supreme Court have been included in the work plan, is still at the demonstration stage.

Loose Fund is the key

Securities crime reconnaissance Public Security Bureau who told reporters : “This inventory is not the focus of all the private placement. is not standardized Private Fund. “Some small private fund, as recommended by network shares, also promised the end of the proceeds, due to be dishonest, in the face of these funds is often small and medium-sized investors, Some people even eat is money, money raising mission to bring private placement investment to do so once the market down, the risk is big.

Private fund industry undoubtedly the most sensitive inventory operations

“You observe this time of the plane, the signs are still very obvious.” Beijing a private fund controlled by hand then open the computer, point out a few stocks.

“Private Fund preferred stock generally have the following characteristics : First, the large price fluctuations; Second, the Notice of very concentrated shareholding, but the former 10 tradable shares the largest shareholder of the Fund nor roster spreads. Once again small capitalization stocks, because large tray of small funds prized moves. “This handful of stocks near future indeed detect the trend of unilateralism downlink.

The market generally believes that private fund-scale at least 1 trillion. Before 2001, when the central bank’s policy of non-financial institutions Secretary Xia estimates, Private fund size of over 700 billion.

A large private fund controlled by hand, the domestic private fund although the amount is not accurate statistical data, But it can definitely yes, Private Fund has become a bull market in the current round of a major force.

What is worrisome is that this rapid expansion of private teams, the norm of private accounts for only a small part.

According to the industry, the market is now on the private placement of four main types

The first one is the Trust Fund. Such funds to allow customers to move funds to the Trust, a trust company with private fund managers signed a management agreement, Fund managers from the private placement for investment management. Managers buy a certain proportion as 20%, but the interests of managers out after In other words, after making first compensation. This private placement through a trust basis of the Law, the legal definition is very clear, standardized trust schemes. Currently on the market, such private placement is not total more than 10 billion.

The second type of company funds, investors in general a few people to set up a company and inject funds, then handed over to a professional management company to manage. “This is now more popular way, which is characterized by participants must become shareholders, the drawback is not done, only between acquaintances, Issue large area impossible. ”

The third type is the limited partnership. Party money, and the other professional capacity, to set up a company, agreed in the charter allocation ratio not fully funded in accordance with the distribution ratio. “This way, not later than now, and is not large, but the future direction of the private placement.”

The last is the most traditional way is a loose-Private Funds by one person or a team for the capital of customer service, providing advice or agency operations, “This type now accounts for the majority of the total private placement, at a conservative estimate about 200 billion, But this is also the biggest risk, “a fund investors said.

Private judicial interpretation is proof

All along, our Private Fund on the law is not perfect and only the “Securities Law” is the tenth of a principle : “Non-public offerings of securities, and shall not be used advertising, proselytizing in public and covert and open manner. “and published on the eligibility and supervision no legal norms, a large number of private funds across the legal and not legal gray area.

“Private Fund is the first of moral hazard, and then the profitability of the professional risk, if money managers bother them. That is down the drain. “People in the industry believe.

“Trust-fund money in the bank, who also Nabuzou and corporate funds through the equity arrangements, individual difficult to bother them money, but the loose-Private faced two risks : First, fund managers Quanxin flee. 2 in market operations the risk of losses. ”

“We found the practice Private, the most important characteristic is targeting the specific issue of the majority of people. Found not to regulate the private placement, There are two main characteristics : First, ensure commitment to the end of the proceeds, Second, whether the funds into the account managers. “Shanghai’s two High Court President of the Chamber Zhou told the reporter.

It is learned that this year, Private Fund cases increased gradually, Shanghai court system only has so far received two cases of Private Fund.

Private Fund is now in a three-state — without the approval of the qualifications, and without assuming responsibility for their ability, can not control and therefore need norms. According to the report, Private Fund explained that the judicial work has been included in the Supreme Court this year’s work plan, now in the demonstration stage.

People in the industry point out that this was not standardized inventory of private funds, the market will not face capital to minimize the impact. “Now the market is still excess liquidity, is the influx of foreign capital, non-standard private fund-out, not affect the market fundamentals and contrary to the healthy development of the market. “

Copyright Fund China 2008.

You Might Like: