Legal Problems Of The Private Placement Of Securities Issued Regulatory Regime

With the forwarding of reform in domestic finance area, the regulation system that each securities offering shall be examined and verified by the Securities Authority has been questioned more and more, especially for those private placements. As an important supplement to the public offering, the private placement has a critical impact on the development of one country' s capital market. The real private placement is however not common in China. Some of the private placement is legally defined but does not totally have the substance of the private placement, while the others show the opposite. This shall, to a large extent, be attributed to the misunderstanding of the private placement by the supervisor. This paper is aiming at the disclosure of the substantial connection between the private placement and the regulation system by the legal and economic analysis of securities private placement system of the United States and other countries, and the exploration of the design of a regulation system fit for our country by the comparison between securities regulation of the United States and China. By doing so, a totally new approach to the import of the private placement and its regulation system may well loom up.The discussion in this paper benefits from such means as comparative study, empirical study, contextual study and historical study. The paper consists of six parts. The first chapter introduces to us the reason and meaning of topic selection. The second chapter defines the relevant concepts, provides a theoretical foundation for the following content, and states the value of law and economy of regulation of the private placement. This part is followed by the proposed design of regulation system in private placement for our country, which is divided into three specific systems: the general initiative regulation, the special initiative regulation and the passive regulation. Chapter 3, 4 and 5 constitute the detailed analysis of such three systems. In Chapter 3, the author proposed to establish a system called "exemption from examination and verification" by making the exemption from registration system in the U.S. securities law a good example to follow. It is pointed out that this system shall constitute the core of the entire regulation system for the private placement. In Chapter 4, the author designed a limitation for secondary offerings and other post-offerings system, providing an exception to the private placement' s exemption from pre-regulation, and offsetting the defect of law. Chapter 5 is the study on the anti-fraud remedy system in the private placement. Since such systems in the private placement and the public offering have some commons in nature, the author found it wiser to do some adjustments and amendments to the existing system stipulated in China' s securities law, and cause the fraud in the private placement covered by the civil remedy system. The last chapter is a summary of the whole article, which emphasizes the importance of the standardized and reasonable regulation of private placement.