The development of securities investment funds is of great significance to standardize the securities market, but there are also many problems in the operation of closed-end securities investment funds. Recently, China Securities Investment Fund with Open Arms will be launched soon. This paper analyzes the advantages of open-end securities investment funds from the perspective of discussing the problems existing in closed-end funds, and puts forward a correct understanding of the limitations of open-end securities investment funds in China in terms of issuance scale, investment risk, investment concept and market operation. This paper puts forward the basic ideas of perfecting fund legislation, establishing a standardized fund supervision system, formulating the correct development steps of open-end funds, strengthening theoretical research and fund talent training, and perfecting the securities market to create a good environment for fund development. Key words: closed-end securities investment fund, open-end securities investment fund, basic idea 1. The Significance of Developing Securities Investment Fund in China Fundamentally speaking, it is undoubtedly a very meaningful thing to increase institutional investors in the securities market and expand the sources of funds in the securities market. The development of large-scale securities investment funds is good for the stock market for a long time. Because the securities investment fund will be put into the market after its establishment, it will inevitably increase the supply of funds in the market from the final result. At the same time, with the development of securities investment funds, its operation will be gradually standardized, and the standardization of funds will greatly promote the trend of the stock market. Moreover, with the standardized development of securities investment funds, it will also provide a fundamental guarantee for the healthy development of the stock market. At present, an important reason for the ups and downs of China stock market lies in the lack of standardized institutional investors in the market. Developing securities investment funds is an important way to cultivate institutional investors in the market. At present, only 25% of the American stock market are individual investors, while there are few individual investors in Japan, and most of them invest in securities by joining investment funds. In the stock market of developed countries, investment funds have become the main body of investment, and because of the large scale of investment funds, their behavior will inevitably tend to invest rather than speculate. This will play a very important role in the stable development of the stock market. Since 1998 launched the first closed-end securities investment fund, up to now, there are 14 fund management companies and 34 closed-end securities investment funds in China, with a net value of 84.7 billion yuan at the end of 200o and 344 fund employees. Second, the main problems of closed-end securities investment funds are in the over-speculative securities market, and the development of closed-end securities investment funds directly faces the following problems: 1. How to ensure the safety and income of fund investors? Historically, the funds in China's securities market have had poor returns in the bear market. Especially for the old funds, due to the lack of internal constraints on the investment direction, the investment is chaotic, and industrial investment, real estate investment and securities investment are all stuck, and most funds are losing money. Only after 1996, the stock market entered the market substantially, and some funds were profitable. Generally speaking, funds that mainly invest in the securities market basically rely on "heaven" for a living, that is, bull market profits and bear market losses. If the China stock market continues to be depressed, then the income of fund investors is not guaranteed. 2. Where should the income of securities investment funds mainly come from? In the securities market, listed companies are the only wealth creators and providers. In the stock market of developed countries, it is the performance and growth of listed companies that support the development of the stock market and provide sustained profits for the stock market. A large number of fund managers gain income through operation, the main purpose of which is to share the fruits of their business development with listed companies. Therefore, the fund operation is based on obtaining investment income. However, the listed companies in China stock market are inefficient, unable to support Gao Qi's share price and provide a steady stream of profits for the stock market. Funds or other securities institutions cannot make money from listed companies, so they have to take various measures to make money from shareholders. When the fund is profitable, it does not rely on the profits provided by listed companies, but on the continuous influx of new investors and their continuous "succession", which may lead to the misguided development of securities investment funds. 3. How to ensure that the securities investment fund itself is not excessively speculative? In China's securities market, the performance of listed companies is declining year by year, which makes the stock market lack a solid foundation for rising. The securities market can only be a high-risk speculative market, which will also encourage the speculation of securities investment funds. At the same time, how to ensure that the securities investment fund itself is not regarded as the object of speculation? In the China stock market, which lacks the performance support of listed companies, many old funds that have been listed are used as speculation tools by bookmakers, and their speculation degree exceeds that of stocks, and the fluctuation range is much greater than that of ordinary stocks. Closed-end securities investment funds, in the market. It is also difficult to ensure that it will not become a tool for institutional speculation and become a speculative object of speculation. 4. How to improve the corporate governance structure of fund management companies? Theoretically speaking, the three parties related to the fund, namely investors, managers and custodians, should be independent and mutually restrictive. Only in this way can we ensure the compliance operation of the fund. However, in reality, investors of closed-end securities investment funds can only buy and sell fund shares in the market, and it is difficult to form a direct binding relationship with fund managers, especially in the case of imperfect credit mechanism. In addition, most of the current fund custodians are commercial banks and have little interest in the stock market. None of their related personnel are experts in the stock market. The custodian is only responsible for the custody of relevant funds, and it is difficult to form effective supervision over fund managers. Superman and major shareholders of fund management companies are generally securities companies and other institutions with interests in the stock market. Therefore, for fund management companies, in the absence of necessary supervision, there may be problems of large shareholder manipulation and private transactions.