Generally speaking, the inferior beneficiary refers to the structured trust products issued by trust companies relative to priority beneficiaries. In the same product, the priority beneficiaries share a lower rate of return and bear less risks, while the inferior beneficiaries bear more risks and get higher benefits. In the securities investment trust business, the trust company is nominally the initiator of the issuance trust plan, but in fact some securities investment trust businesses are initiated by one (or several) investors. Some investors have good investment ability, but limited funds, so they issue trust plans in the name of trust companies to raise funds and increase income. In this trust plan, although the trust company still hires another investment consultant in name, in fact, only investors can really decide the direction, time, quantity and price of securities trading. In order to restrain the behavior of investors, in this kind of trust plan, the lowest income level of other ordinary investors is usually guaranteed, and a compulsory liquidation line is set up to stipulate the losses that investors should make up immediately when they lose money. At this time, investors are figuratively called "inferior beneficiaries" and other ordinary investors are called "priority beneficiaries".
When a trust company issues a trust plan for the "inferior beneficiary", it actually provides financing services for the "inferior beneficiary" to buy and sell securities. According to the provisions of Article 142 of the Securities Law, securities companies providing margin financing and securities lending services for customers to buy and sell securities shall comply with the provisions of the State Council and be approved by the securities regulatory authority in the State Council. Of course, securities companies have no direct legal relationship with "inferior beneficiaries" in this kind of business, and there is no violation, but after all, they are suspected of playing the legal edge ball. When there is evidence that securities companies actively match trust companies for "inferior beneficiaries" and promote the issuance of trust plans, securities companies still have greater illegal risks. Fortunately, most securities investment trust schemes do not involve "inferior beneficiaries". It is common that all beneficiaries are treated equally, and the minimum income is not guaranteed, and securities companies can participate reasonably and legally.