Financial asset management is a broad concept. Current players in this market are financial institutions such as banks, managers of trusts, securities, funds, futures and insurance assets, and financial asset investment companies; asset management products, whether in form of RMB or foreign currencies, include, inter alia, financial products offered by banks without principal guarantees, trust funds, and products launched by securities companies, fund managers, futures companies and their subsidiaries, insurance asset managers and financial asset investment companies. Disputes arising from financial asset management also cover a wide range of types, primarily occurring at the fund level between AMCs and their product investors, at the asset level due to AMCs' use of raised funds, and other types in connection with asset management practices.
In recent years, the financial asset management market has seen a rise in dispute cases triggered by declining liquidity, which is a combined result of market changes and intensified regulatory measures such as the breaking of rigid payment, restraints on channel services and non-standardized asset services, separation of on-balance-sheet and off-balance-sheet business, implementation of look-through regulation, and enhanced protection of financial consumers. Surging cases have paved the way for both the judiciary and the industry to form a clearer understanding and, in some cases, preliminary consensus, on many legal issues in this field.
Han Kun has gained first-hand, in-depth experience in financial asset management dispute resolution, having practiced in the field for more than a decade and advising on hundreds of dispute cases spanning non-contentious counsel, litigation, arbitration and enforcement proceedings. We have borne witness to the evolution of adjudicative principles in this field.
Last year, Han Kun released its 2020 Blue Book of Business Trust (Volume I), which particularly addresses resolving risks between trust companies and investors. This year, Volume II of the Blue Book focuses on topical issues such as rigid payments, third-party credit enhancement, equity-debt contention, mortgage issues in real estate projects, private fund liquidity concerns, asset securitization dispute resolution, fair treatment for investors, determination of actual loss, and valuation matters. It remains premature to come up with established judicial principles for some of those issues due to a limited number of precedents and thus it is truly necessary to engage in deep contemplation, analysis, and discussions among industry participants. All the topics discussed in this Blue Book and most of the thoughts shared therein are inspired by real cases we have handled in practice. The 2022 Blue Book, totaling 150,000 Chinese characters, aims to reveal our thinking on these controversial issues of concern through the eyes of practicing lawyers. We hope that this Blue Book will spark more vigorous discussions and debates over these emerging and significant matters and contribute to the development of financial asset management dispute resolution practices.