First of all, the scope of related party transactions is extensive and uncertain.
Secondly, the legal status of fund affiliated companies is dual and contradictory. Take the fund manager as an example. As a fund manager, he has a trust relationship with the fund in the trust law, and has a loyal obligation to the fund and fund holders, and should protect the interests of the fund and fund holders to the maximum extent in the transaction. On the other hand, as the other party to the fund transaction, it must have its own independent interests and have an equal subject status with the fund. The duality and contradiction of this position will inevitably lead to conflicts of interest. Without the supervision of holders and asymmetric information, fund managers are likely to violate their loyalty obligations for their own interests and harm the interests of the fund. This is also the main reason why fund related transactions are strictly regulated by law.
Third, the forms of related party transactions are diverse and complicated.
Fourth, the control of related party transactions is limited. The legal control over related transactions of funds is also limited, and it is not completely prohibited.