China's Private Placement Of Securities Issued Legal Problems

Securities private offering is the principal element in today's world capital market and has become an indispensable investment and financing way in economic developmentprocess of every nation. For recent years, golable securities private offering has assumed the trend of accerlerated develoment and played more and more impornent roles in the economic field.Securities private offering, stemming from America, complements and corresponds with securities public offering. For the reasons that its operation can save financing offering cost, supervision cost, eliminate the phenomena of dissymmetrical information, possess high flexibility and confidentiality, embodying rapid financing efficency in capital market, securities private offering has been widely used in many countries and regions. However, the two sides of every thing decides that there is disadvantages in the securities private offering. For the experienced investors and not easily negotible, the private offering approach makes the investors face high investment venture and when the ventures happen, the stability of securities market will also be influenced. Therefore, every country and region supervise this offering way when establish the validity and found related comparatively completed legal system with their own characteristics in the long time practice and explored.However, as far as China concerned, in the early period of reform and opening to the outside world, the competent legislatures and supervision organs didn't place enough emphsis to this approach and the private offering market being orderly supervised and formulated had not been formed. But there is a lot of private offering capital among the people and it is imperative to solve many historical remains problems in the practice. Currently, in the period of vigorously develop capital market, our country made tremendous efforts to explore private offering. Although the systematic private offering legal system with commonness has not been formed, the newly revised Corporation Law and Securities Law reserves room for the establishment of Securities private offering legal system. Therefore, this paper is intended to reseach and discuss in the following five aspects by the title of " The Research on Securities Private Offering Legal System in China".Section 1 Brief introduction of securities private offering legal systemDefinitely definining the concept of private offering, analysing contents should be included in the private offering from legal elements and analysing the differences among private collection,public collection. Then the writer has analysised different kinds of private collection,such as the private collection of stocks and bonds.Section 2 The comparison of securities private offering in The U.S.A and TaiwanIn this section, the writer selects private offering in America and Taiwan Region of China to be the referent object. The writer mainly analyses the detailed contents of three laws and regulations of Article 4(2) in Securities Law (1933), Regulation D(1982) and Rule144A(1990) when introduces and analyses the legal system of private offering in America and concludes its characteristics. However, when introducing the legal system of private offering in Taiwan Region of China, the writer analyses and concludes its characteristics and mainly contents based on the related regulations of Corporation Law and Securities Exchange Law in Taiwan. Through above analysis, the writer also reflects what we should learn from them to establish the private offering legal system in the future and advances some factors should be paid attention to.Section 3 The recollection of practice and legislation of private offering in ChinaThe practice of private offering in China can retrace to early 90s of last century. In the development process of this decade, with many kinds of securities and different sizes, private offering has been used in many field of security market, among which is accompanied with public offering. We can find the clues of private offering in the early interior employees stock offering, the ration between security investment fund and legal person and in the offering of B stock being under persistent exploration, while many practices of the recent direct security corporation bond offering, the specific institution secondary private security offering and the private collection performance of collective capital management schemes and collective trust schemes also demonstrate that the private offering in China is matching toward normalization. However, we can not deny the fact that there are lots of problems in the practice as well. The regulations in our country currently concerning the private offering belongs to parts rules and separated legislation which lead to the indistinction and uncertainy of private offering system and make the validity confined to a certain scope. By that reasons, the predictablity and diaphaneity of private offering activity by the potential participators in the security market are debased. In addition, the legislation don't establish the relevant system from the legal elements of private offering, which lead to the no-normalization of private offering behaviors in the practice and the deviation from private offering in the standard sense.Section 4 All regulation on private offering in Corporation Law and Security LawIn this section,the writer has analysised the regulation of private offering in Corporation Law and Securities Law, and points out the defect parts.Section 5 The detailed tentative plan of establishing securities private offering legal system in our countryThis section firstly discusses the establishment of the legislative patterns, forms selection and supervision principles. The writer analyses four kinds of legislative patterns one by one and makes practical decisions, that is, defining the qualifications of both two sides of publishers and investors at the same time. Concerning supervision pricinples, the writer advices adding addtional rules on the premise of implementing public offering authorization. We should deal with the special conditions differently and gradually realise the offering authorization transit from authorization to entrolment and private one. Then, starting with the legal elements should be possessed by private offering, the writer puts forward many regulations advices respectively from the detailed design of the rules of publishers qualifications and private offering decisions, the limitation of the offering object qualifications and number, the limitation of private offering approach, the demand of information disclosure, the limitation of resale and many other factors. In the end, the writer place emphasis on the importancy of appropriately setting liability in establishing the private offering legal system in our country and on the ratio of balancing civil liability, criminal liability and administrative liability. Only from protecting the investors' benefit, can we promote the equal and orderly development of security market.