Contractual investment funds in developed countries and regions such as Britain, Japan, Germany, South Korea and Hong Kong should be regulated by relevant trust laws and regulations, and trust deed, which stipulates the rights and obligations of the three parties, is its typical feature. Judging from the situation of relevant countries, there are three types of specific trust structure arrangements for contractual funds: Swiss model, Japanese model and German model, each with its own advantages and disadvantages.

Swiss model

The Swiss model regulates the rights and obligations of all parties (fund managers and investors) through a "collective investment contract", which may or may not have a trustee. If a custodian bank is designated, the custodian bank is also the signatory of the contract. The Swiss model regards investment funds as portfolio assets and keeps them in a separate account. Therefore, although the fund contract has no obvious new subject except the signing subject, it is a trust with only two necessary parties, but the independent account actually exists independently of the investor and the manager. The independence of this contractual fund is not clear, which represents the legal treatment of investment funds in civil law countries that have not introduced the trust system.

German model

The German model is also called the dual model. 1956 Germany promulgated the investment company law, which made it clear that all its investment funds are contractual. The two special designs of this law are "special property" and "custody bank". Special property is funds raised and managed by investment companies. Because of its special legal status, investment companies and custodian banks are not allowed to request it to be enforced, and the rights and interests of this special property division are represented by beneficiary securities. In this way, there is no difference between special property and "trust property" in trust law, and the status of investors is no different from that of trust beneficiaries. The difference is that the legal relationship between investors, investment companies (managers) and custodian banks is stipulated by the coexistence of two contracts: First, investors and investment companies conclude trust deed. When investors buy beneficiary securities, they gain the status of trust deed's principal and beneficiary, while the investment company is in the position of trustee, that is, the nominal holder of "special property" and is responsible for the operation of the property; Second, the investment company signed a custody contract with the custody bank. The custodian bank is responsible for the safety and integrity of "special property", and disposes of the property according to the instructions of the investment company. It is also responsible for supervising the investment company to act in accordance with trust deed, and bringing a lawsuit against its specific illegal acts, and even has the right to stop exercising the rights of the investment company. Therefore, focusing on special property, the law stipulates the legal relationship among investment companies, custodian banks and beneficiaries. The custodian bank is the guardian of the fund, which is different from the custodian bank of the American investment company law, with wider authority and greater functions.

Under this dual mode, the three parties of investment funds are not unified in a legal relationship like Japanese law, but are regulated by the relationship between trust deed and custody contract. Through the trust relationship between investors and managers, this model ensures that investors can directly claim rights from managers in case of disputes, which effectively protects the interests of investors. The disadvantage is that there is no contractual relationship between investors and custodians. Once the custodian bank violates its obligations, investors cannot directly claim their rights, which is not conducive to protecting the rights of investors.

Japanese model

The Japanese model is also called the single model. According to the Japanese Securities Investment Trust Law of 195 1, the overall structure takes the securities investment trust deed as the core, and the contract connects the manager, custodian and beneficiary, forming a trinity relationship. Specifically, after issuing beneficiary certificates to raise the securities investment trust fund, the fund manager will sign a securities investment trust deed with the fund custodian (custodian bank) as the trustee, with the fund investor as the beneficiary. Accordingly, the trustee obtains the nominal ownership of the fund assets, and is responsible for the custody and supervision, while the trustor reserves the command right to invest and use the fund assets, and the beneficiary enjoys the investment income right of the trust fund according to the records of the beneficiary securities. It can be seen that the Japanese practice is to use trust deed to regulate the rights and obligations of all stakeholders. This is obviously different from the structure in German law. South Korea and Taiwan Province Province of China also adopted the Japanese model.

The structure of Japanese law simplifies the legal relationship between fund stakeholders and defines the trust relationship between managers and investors and between managers and custodians. These are undoubtedly more progressive than the structure of German law, but there are also many problems in actual operation. First of all, the principal status of fund managers is contrary to the jurisprudence of trust law. In a typical trust relationship, the client should have the original ownership of the trust property (which is also stipulated in China's Trust Law), but the fund manager obviously does not have this condition. Secondly, the role of the trustee is also debatable. According to trust jurisprudence, the trustee should actively participate in property management, while the trustee in the Japanese model only has custody and supervision over the fund assets, which leads to "negative trust". The above problems lead to unclear rights and obligations of beneficiaries, administrators and custodians. In the event of a dispute, the beneficiary may lack the legal basis for claiming rights from the administrator, and it is difficult to achieve results because the latter is only a passive trust.

From the comparison of the above models, it can be seen that the legislative difficulty of contractual fund organization structure in dealing with the legal relationship between the parties focuses on the determination of the legal status of fund managers, while the difficulty in determining the legal status of fund managers comes from the particularity of investment fund governance structure, that is, in addition to the separation of fund property ownership and beneficial rights, there is also the separation of fund property ownership and management rights. However, no matter how countries determine the legal status of fund managers, they all stipulate that fund managers have the obligation of good faith to fund beneficiaries or holders without exception, in order to make managers bear the same obligations as trust trustees.

The legislative form of regulating the legal relationship between the parties of contractual investment funds should be consistent with the operating mechanism of contractual investment funds to protect investors. This is the starting point for China's relevant legislation to learn from other countries' models.