Private law and public regulation for investor protection in the asset management industry: aims and practices of transposing the UK model in China

Abstract

The paper discusses how asset managers are regulated in the UK in order to provide investor protection and market confidence. Fiduciary duties and the duty of care in the English common law, statutory laws, the rules of the Financial Conduct Authority (FCA), and other industry codes are examined to provide an explanation of the UK regulatory approach to the asset management industry. The paper then discusses the extent to which a legal transplant of the UK model to China may be feasible as the asset management industry is currently being reformed in China. Recommendations are made for China to develop an independent asset management industry, to provide more investment outlets for investors, and to have effective enforcement mechanisms of laws and rules to deliver market confidence and investor protection.