Core Viewpoint - Private equity funds play an increasingly important role in China's multi-tiered capital market system, serving the real economy and meeting residents' wealth management needs, with a management scale of 19.93 trillion yuan and 144,100 products by the end of 2024 [1] Group 1: Responsibilities and Value Functions of Custodian Securities Companies - The responsibilities of custodian securities companies are defined by both legal regulations and fund contracts, including the safe custody of fund assets and supervision of fund managers' investment operations [2] - The core value of the custodian system lies in establishing a governance structure that separates fund asset management from custody, effectively preventing moral hazards from fund managers and protecting investors' interests [3] Group 2: Challenges Faced by Custodian Securities Companies - Despite the good intentions behind the custodian system, custodians face challenges in fulfilling their responsibilities, leading to instances of ineffective supervision [4] - There is a lack of consensus on the supervisory standards for custodians, with theoretical debates between "formal supervision" and "substantive supervision" [5] - Some custodians have failed to perform their duties effectively, leading to cases where supervision is merely formal, undermining the trust of investors in the private equity fund industry [7] Group 3: Recommendations for Improving the Custodian System - To enhance the effectiveness of custodians, it is essential to clarify supervisory standards and create a differentiated framework for responsibilities based on the performance of fund managers [9] - Strengthening the independence of custodians is crucial, suggesting a more transparent selection process that involves investors in choosing custodians [10] - Exploring the establishment of a liability insurance system for custodians can help mitigate risks and encourage thorough supervision, thereby enhancing the stability of the custodian framework [11]