Investment entrustment is a legal mechanism whereby a capital-owning party entrusts another party with professional expertise to manage and invest such capital, for the purpose of making investments in financial instruments or asset portfolios in accordance with an agreed arrangement. The essence of investment entrustment does not involve a transfer of ownership of the capital, but rather the delegation of management authority and investment decision-making powers within a pre-defined scope.

The subject matter of investment entrustment includes cash, securities, financial assets, and other lawful property rights that are permitted to be traded under applicable laws. The entrusted party must be an organization legally authorized to conduct investment management activities and must satisfy statutory requirements regarding professional capacity, risk management, and regulatory compliance.

From a legal structure perspective, investment entrustment is established through an entrustment agreement, which clearly defines the investment objectives, investment limits, asset management mechanisms, and the allocation of benefits and risks. Such activities are governed concurrently by civil law and relevant specialized legislation, ensuring the principles of transparency, segregation of assets, and protection of the entrusting party’s lawful interests.