On The Structuring Of Legal System On The Private Placement

As a popular channel to offer securities in today’s world, the private placement regime boasts a vital role in financing the developed capital markets, as important as the public offering. There are three main characteristics of this channel:a simple issuance process, a short cycle, and an easy review system, which remedies the public equity perfectly. The private placement has inherent advantages in promoting the circulation of capitals, enhancing the efficiency of financing, and saving issuance fees. On a micro basis, the private placement fulfils the enterprises’financing needs, and increases their competitiveness; while on a macro basis, it plays a more and more important role in the field of funds by providing an effectively and economical channel for investing and financing. The establishment of this regime is believed to advance tremendously the development of the capital economics.Nevertheless, China’s legal environment for the private placement is not optimistic, due to the lack and imperfection in legal system. In this article it is proposed to structure the domestic legal system on securities, by expounding the basic theories and the conceptions relevant to the private placement regime, and benefitting from the US legal system in this field.