The first paragraph: the lack of policies and regulations leads to regulatory loopholes. In the field of investment funds, domestic laws and regulations are not perfect, and the fund supervision system has not yet formed a set of effective guiding documents. At the same time, there are many levels of regulatory agencies and scattered regulatory responsibilities, which also leads to blind spots in supervision.

The second paragraph: the awareness of public investment funds is relatively weak. In the process of fund investment, the public generally have problems such as insufficient risk awareness and risk tolerance of fund products, and their understanding of fund investment knowledge and investment risks is not in place. This makes some practitioners use the public's vague concept and lack of knowledge about fund products to manipulate funds and their performance, thus forming regulatory loopholes.

Paragraph 3: Poor internal management aggravates regulatory loopholes. Fund managers and fund custodians play an important role in fund supervision. However, due to fierce market competition, some employees have some improper behaviors such as pursuing interests and avoiding risks. Although these behaviors may violate laws and regulations, fund companies with poor internal management may have problems such as connivance and even interest transfer. This is more prone to regulatory loopholes.