I. What is trust

Trust is a kind of property management system, and its core content is "entrusted by people to manage money on behalf of others". It refers to the act that the principal entrusts his property rights to the trustee based on his trust in the trustee, and the trustee manages or disposes in his own name for the benefit of the beneficiary or for a specific purpose according to the wishes of the principal. There are three parties in a trust relationship, namely, the principal, the trustee and the beneficiary. Among them, the trustee manages and disposes of the property in his own name. Among them, the meaning of property right includes: 1. The actual right to use property; 2. Beneficial right to obtain property income; 3, the implementation of the power of property management; 4. Right to dispose of property.

second, what are the types of trusts

according to the nature of the purpose of the trust, the trust is divided into private trust and public trust. A trust established for private purposes is a private trust, and a trust established for public purposes belongs to a public trust. Private trust can be divided into business trust and non-business trust. A business trust is a trust established by an individual or legal person who entrusts a business trust institution to conduct property management for the purpose of increasing the value of property. Non-operating trust is not only a civil trust as mentioned in the trust law, but also a trust established by an individual for the purpose of raising, supporting, supporting and handling the inheritance, and entrusted with any non-profit business to manage the property. Public trust is a trust established for the purpose of developing public undertakings, and the trust property can only be used for public undertakings. China's trust law includes the public trust and private trust, covering all kinds of trust activities.

from the trust theory and the development experience of foreign trust industry, the functions of trust industry mainly include property management, financing, coordinating economic relations, social investment and serving social public welfare undertakings.

Third, the trust industry firmly occupies an important place in the financial institution system of modern countries with its unique functions, which are different from other financial institutions, and has won the reputation of "financial department store" with its rich functions. However, it must be clear that although the trust industry has many functions today, its original function-property management function is its basic function, and other functions are born on the basis of this function.

(1) Property management function

Property management function refers to the function of managing or handling property entrusted by the trustee of a trust, that is, "entrusted by the trustee, managing the management of the management of the management of the management of the management of the management of the management of the management of the management of the management of the management of the wealth on behalf of others", which is the basic function of the trust industry. What modern trust industry is engaged in, whether it is money trust or physical trust, belongs to the application of property management function, and its theoretical support is modern property right theory. Under this function, the trust industry, as the trustee, must issue loans or make investments according to the requirements of the principal or the specific projects designated by it, so as to benefit the principal or beneficiaries. Moreover, all the proceeds from the trust property belong to the beneficiaries, and the trust institution can only charge the corresponding handling fee according to the contract.

(II) Function of financing

The function of financing means that the trust industry, as an important part of the financial industry, is endowed with the function of adjusting the surplus and deficiency of funds, and acts as a credit intermediary to raise funds for a country's economic construction and adjust supply and demand. Under the condition of commodity monetary economy, a considerable part of the property exists in the form of monetary funds, so the management and application of these trust properties will inevitably be accompanied by the financing of monetary funds. On the surface, this function of trust industry is similar to that of credit, but in fact it is qualitatively different: in terms of financing objects, trust not only finances but also melts things; In the credit relationship, trust embodies the multilateral relationship between the principal, the trustee and the beneficiary; In the form of financing, the combination of direct financing and indirect financing is realized; In the form of credit, trust becomes the combination of bank credit and commercial credit. Therefore, trust financing has obvious advantages over credit financing.

(3) function of coordinating economic relations

the function of coordinating economic relations refers to the function of the trust industry to handle and coordinate economic relations among trading entities and provide them with trust and consulting services. Because there is no transfer of ownership, it is different from the first two functional forms. In modern economic life, the inherent information is incomplete and the opportunistic behavior tendency in the memory of the transaction subject makes the transaction cost more and more expensive. Therefore, in order to reduce the transaction cost and weaken the opportunistic behavior of the counterparty, the transaction subject usually needs to know the economic information related to its operation, such as economic policy, technical feasibility, counterparty's credit standing, business ability, payment ability, business style, market price, interest rate, exchange rate and even life customs. Trust institutions act as "guarantors", "witnesses", "consultants" and "intermediaries" through their business activities, providing economic information and economic security for the trading subjects.

(4) Social investment function. It refers to the function of trust industry to participate in social investment activities by means of trust business. The development and extension of trust business is bound to be accompanied by the appearance of investment behavior, and only when trust institutions enjoy the right to invest and have appropriate investment methods can their property management functions have a reliable foundation. Therefore, it is a common practice for trust institutions to start investment business in many countries in the world. The social investment function of trust industry can be embodied through trust investment business and securities investment business. In China, trust and investment business has been the most important business since trust institutions resumed in 1979, which can be seen from the fact that most trust institutions in China are named as "trust and investment companies". Therefore, the social investment function can be positioned as one of the auxiliary functions of the trust industry in China, but this function must be used and brought into play according to the requirements of the trust principle.

(5) the function of serving social welfare undertakings. It refers to the function that the trust industry can serve the clients who want to donate or finance social welfare undertakings to achieve their specific purposes. With the development of economy and the improvement of social civilization, more and more people are enthusiastic about academic, scientific research, education, charity, religion and other public welfare undertakings, and have donated money or set up foundations one after another. However, they generally lack management experience in donating or raising funds, and hope that the public welfare undertakings they enthusiastically support can continue, so they have the desire to cooperate with trust institutions to handle public welfare undertakings. When the trust industry uses funds for public welfare undertakings, it generally adopts safe and less risky investment methods, such as selecting government bonds as investment targets. When trust institutions conduct business related to public welfare undertakings, the fees are generally low, and some even provide free services without fees.

To sum up, the conclusion is: as the trust system is a property transfer and management system, and the essence of the trust industry is a property management institution, the functional orientation of the trust industry in China should be: the property management function is the main function, followed by the financing function, supplemented by the functions of coordinating economic relations, social investment and serving social public welfare undertakings.