what is the life course of a fund? Let's tell you that the emergence, development and demise of a fund need to go through certain procedures. As investors, we should also know some relevant knowledge and understand the possible changes of the fund we invest in, so as to make scientific investment decisions.

the life course of the fund 1. the establishment of the fund

the fund was established by the fund sponsors. According to the provisions of the Securities Investment Fund Law of the People's Republic of China, sponsors in China generally need to complete the following tasks when applying for the establishment of a fund:

When applying for the establishment of a fund, fund sponsors must first prepare various legal documents, such as the application report for the establishment of a fund, the sponsor agreement, the fund contract, the fund custody agreement and the fund prospectus. After the fund sponsors prepare various documents, they shall report to the China Securities Regulatory Commission.

after receiving the documents, the China Securities Regulatory Commission will review the completeness and accuracy of the qualifications of fund promoters, fund managers and fund custodians, as well as the fund contract, custody agreement, prospectus and submitted materials. If the documents meet the relevant standards, the fund promoters will be formally approved to publicly issue funds.

after receiving the approval from China Securities Regulatory Commission, the fund sponsors will announce the prospectus and the specific issuance plan three days before the issuance. In the Securities Investment Fund Law and its implementation guidelines, there are also some provisions on the fund itself. For example, promoters can apply for the establishment of open-end funds or closed-end funds, and it is stipulated that the duration of closed-end funds should not be less than 5 years, and the minimum raised amount should not be less than 2 million yuan.

after the fund is approved for public sale, it does not mean that the fund has been formally established. To formally establish a fund, certain conditions must be met: for closed-end funds, the funds raised within three months from the date of approval of the fund exceed 8% of the approved scale; For open-end funds, the net sales within 3 months from the date of approval shall not be less than 2 million yuan.

the amount of funds raised needs to be verified by an accounting firm. Before the fund was formally established, the raised funds could only be deposited in commercial banks and could not be used.

after the fund is formally established, the fund management company can formally assume the responsibility of fund asset management, and use the raised funds for investment operation. When the fund cannot be established, the fund promoters must bear the fund raising expenses and return the raised funds together with the interest on demand deposits to investors. Even if the fund cannot be established, these provisions first ensure that the basic interests of investors will not be lost.

Life course of the fund 2. Changes of the fund

According to the provisions of Article 65 of the Securities Investment Fund Law of the People's Republic of China, the operation mode of the fund can be changed according to the agreement of the fund contract or the resolution of the fund share holders' meeting and approved by the the State Council securities regulatory authority.

Closed-end funds are securities traded in stock exchanges, and their prices are the result of investors' continuous bidding. In the irrational market state, the intrinsic value of closed-end funds may be seriously underestimated, and there is a problem of high discount rate. If this state persists for a long time, it will greatly harm the interests of fund share holders.

However, the purchase and redemption prices of open-end funds are based on the net value, so there is no such problem. Therefore, the law allows closed-end funds to change their mode of operation, that is, "closed to open", which is an important protective measure to protect closed-end fund share holders from possible long-term losses when they can't find a way out in the secondary market.

However, due to the conversion of closed-end funds into open-end funds, it may bring great redemption pressure to fund managers and force them to change the composition of their asset portfolios, and there are conflicts of interest between the two parties, so fund managers are generally reluctant to convert the closed-end funds they manage into open-end funds.

For this reason, the fund operation mode can only be changed according to the agreement in the fund contract or the resolution of the fund share holders' meeting, and with the approval of the the State Council Securities Regulatory Authority.

closed-end fund raising or fund contract extension shall meet the following conditions and be approved by the State Council securities regulatory authority: (1) the fund has a good operating performance; (2) The fund manager has not been subject to administrative punishment or criminal punishment for illegal acts in the last two years; (3) Resolution adopted by the fund share holders' meeting; (4) Other conditions stipulated in this Law.

Market dynamics

As the first closed-end fund, Societe Generale has obtained a subscription share much higher than the original scale, which is not only good news for Huaxia Fund Company, but also sets a good example for the whole closed-end fund group. As the saying goes, a good beginning is half done, so there is reason to believe that the road of closed-end fund reform will go more smoothly in the future.

after the implementation of the "closed to open", the fund share has not declined, and the subscription share of 1.8 billion yuan has far exceeded the original scale of the fund industry, which is almost equivalent to issuing a new open-end fund, which brings obvious direct benefits to the fund companies that have implemented the "closed to open".

From the market point of view, the previously worried fund selling not only did not happen, but in fact, the "closed to open" also increased the supply of funds in the stock market. The original scale of fund development is 5 million yuan, and with the subscription of 1.8 billion yuan, the total scale will reach 2.3 billion yuan. Although the redemption arrangement of the original holders of the fund Societe Generale has not yet started, even if all the original holders choose to redeem, the scale of the fund will still increase several times, and the stock market will also receive more than one billion yuan of incremental funds.

However, if we think that the closed-end fund reform has been smooth all the way because of the case of fund development, I am afraid it is too optimistic. What needs to be worried next is that those fund companies that don't have strong brands and performance advantages may need to spend more thoughts when designing the transformation plan if they want to successfully implement the "closed to open"; In terms of timing, we also need to consider more market factors.

because the investors of closed-end funds are mainly insurance institutions, QFII and other institutional investors, it is found through tracking that these institutions focus on the medium and long term, and the short-term indicators of some varieties deviate slightly from the normal area, which is quickly discovered by the market.

For example, in November 25, the discount rate of fund Hanxing approached 5%, and then increased by 3% within one month; On May 19, 26, the internal rate of return of Yue Yuan Fund was as high as 29? 56%, followed by a 13% increase in the next three weeks. Therefore, while continuing to be optimistic about closed-end funds as a whole, we should find better buying points of different types of products in different periods according to the signals sent by different market environments and valuation indicators.

Life course of the fund 3. Termination of the fund

According to Article 67 of the Securities Investment Fund Law of the People's Republic of China, the fund contract is terminated under any of the following circumstances:

(1) The term of the fund contract expires without extension;

(2) the fund share holders' meeting decides to terminate;

(3) The duties of the fund manager and fund custodian are terminated, and there is no new fund manager or fund custodian to undertake it within six months;

(4) Other circumstances stipulated in the fund contract.

life course of the fund 4. liquidation of the fund

according to article 68 of the securities investment fund law of the people's Republic of China, when the fund contract is terminated, the fund manager shall organize a liquidation team to liquidate the fund property. The liquidation group consists of fund managers, fund custodians and relevant intermediary service agencies. The liquidation report made by the liquidation group shall be audited by an accounting firm, and after the law firm issues a legal opinion, it shall be reported to the the State Council Securities Regulatory Authority for filing and announcement.

according to this law, the remaining fund property after liquidation shall be distributed in proportion to the share held by the fund share holders. Specifically, after the fund property is liquidated, the remaining fund property after deducting all reasonable expenses, other related expenses and debts incurred by the liquidation team shall be distributed according to the proportion of the fund shares held by the fund share holders, that is, the fund shares held by the fund share holders shall be distributed in proportion, and the fund shares held by the fund share holders shall be distributed in proportion.