What Is a Fiduciary Risk?

The so-called trust risk is a basic concept for whether the principal is returned as scheduled after the end of the investment trust.

Trust risk

Trust funds are safer

First, when the trust product is established, the funds enter the custodian bank exclusively.

Trust risk control measures: Risk control measures are risk control measures. The main risk control measures of the trust are mainly in the form of collaterals and pledges, joint responsibility of third parties, setting up security mats (levels), etc., and a trust's mortgage / pledge The lower the rate, the stronger the third party responsible party, and the larger the proportion of security pads, the safer the trust will be.

There are different risk control measures based on different products, including: mortgage,

The relevant legal provisions of trust wealth management products and other products are also more secure and reliable, which are mainly reflected in the following aspects: ^[1]

a. Article 16 of the Trust Law states: "Trust property shall not be included in or be part of the inherent property of the trustee (trust company). The trustee shall be terminated by dissolution, cancellation, or bankruptcy according to law. The trust property shall not be terminated. Belongs to its liquidation property. "

b. Article 18 of the Trust Law stipulates that the creditor's rights arising from the trustee's management, use and disposal of the trust's property shall not be offset against the debts arising from its inherent property. The trustees' debts arising from the management, use and disposal of the trust property of different clients may not offset each other.

c. Article 15 of the Trust Law stipulates that the trust property is distinguished from other properties where the trustee has not established a trust. After the trust is established, when the trustor dies or is disbanded according to law, is revoked according to law, or is declared bankrupt, the trustor is the sole beneficiary, the trust is terminated, and the trust property is used as its estate or liquidation property; if the trustor is not the only beneficiary, the trust persists , The trust property shall not be regarded as its inheritance or liquidation property; but when the trustor who is the co-beneficiary dies or is disbanded according to law, cancelled in accordance with law, or declared bankrupt, the trust beneficiary right shall be taken as its inheritance or liquidation property.

d. Article 17 of the Trust Law stipulates that the trust property shall not be enforced except in one of the following circumstances.

(1) Before the establishment of the trust, the creditors have enjoyed the right of priority compensation for the trust property and exercised that right according to law;

(2) The trustee's handling of the debt incurred by the trust firm requires the creditor to settle the debt;

(3) the taxes payable by the trust property itself;

(4) Other circumstances stipulated by law.

The client, trustee or beneficiary has the right to raise an objection to the people's court for the enforcement of the trust property in violation of the provisions of the preceding paragraph.