Equity trust is aimed at employees of enterprises, and the trust company undertakes the affairs management here. When the trust is terminated, the trustee shall bear limited liability to the beneficiary only to the extent of the trust property. If the trustee has fulfilled his obligations, even if he fails to obtain the trust benefits or causes losses to the trust property, the trustee will not be liable. Therefore, the risks faced by trust companies in the operation of equity trust are completely different from other trust types.
I. Legality risk of obtaining trust equity
The trust law stipulates that the establishment of a trust must have certain trust property, and the trust property must be legally owned by the client. Equity trust is bound by Company Law, Trust Law and relevant policy documents. If the target enterprise holding shares is a state-owned enterprise, it must also follow the provisions of relevant documents such as the restructuring of state-owned enterprises and the transfer of equity of state-owned enterprises. Therefore, when a trust company accepts an equity trust, it needs to know whether the employee's shareholding behavior has fulfilled the corresponding procedures, such as the approval of the workers' congress and the approval of the state-owned assets department, and confirm the legal source of the delivered funds.
Second, the operational risks in equity management
In equity trust, although the trust company has no obligation to preserve and increase its value, it should pay special attention to operational risks. For example, when establishing an equity trust, employees (beneficiaries) should fully expose various risks that may occur in employee stock ownership trust, and sign legally binding trust documents with relevant parties, including but not limited to supplementary agreements such as trust contracts and risk statements. And express the exemption clause in the trust contract.