Finding equity without the law of equity: asset management, fiduciary duty and financial consumer protection in China

ABSTRACT Asset or wealth management is a booming business in Mainland China. In a civil law system, how do Chinese law and Chinese courts deal with disputes arising out of an asset management relationship, in the absence of the branch of law of equity and trusts? The Chinese lawmakers, regulatory bodies, judges and asset management institutions are faced with challenging legal issues. Who is the owner of the assets under management? What is the nature of the relationship between the investor and the asset manager? Is an investor of an asset management product a consumer? This paper investigates the developments, the current position and the possible future of the law and practice concerning the legal issues that may arise out of the investor-manager relationship in the asset management businesses in Mainland China. The paper would also shed light on how Chinese law and courts deal with issues that would call for the intervention of the principles of equity and trusts in common law jurisdictions.