The Study On The Legal System Of Risks Preventions Of The Crowdfunding In China

In the 21 st century, Internet finance is growing rapidly and changing Chinese economic structure and living conditions of people profoundly along with the high degree of integration between Internet industries and financial markets. As one of the Internet finance models, crowdfunding has quickly subverted the traditional investment and financing models with the features of small amount and large number. Crowdfunding not only broadens the financing channels, improves the financing efficiency and saves the cost of financing, but also enriches the investment modes, reduces the investment threshold and leads the public to enter the era of universal investment. Crowdfunding surely has lots of values, but it is also a double-edged sword as a new phenomenon because it generates many risks when bringing the both parties of investment and financing benefits. The risks of crowdfunding have the characteristics of wide ranges, changing quickly and fierce outbreaks, which is needed to be regulated by perfect legal systems. At present, the legal system of risks preventions of crowdfunding in China is not sound, exposing a lot of disadvantages and easily leading the crowdfunding to die in the consequence of hostile expansions and extensive managements. The perfect legal system of risks preventions of crowdfunding in China must be constructed as soon as possible to maintain the normal order of the crowdfunding markets and protect the legal rights of all the parties involved in crowdfunding. The perfect legal system of risks preventions of crowdfunding can also guarantee sustainable and healthy development of crowdfunding in China and make positive contributions to the economic strategies of public entrepreneurships and innovations and the ascendant deepening reforms in financial fields. This thesis is divided into five chapters, the basic content is as follows:The introduction section introduces the topic selection background firstly, then discusses and summarizes the purposes, significances, ideas and methods of this thesis. Finally, sorts and analyzes the literatures on the legal system of risks preventions of crowdfunding from two perspectives of home and abroad.The first chapter mainly focuses on the basic theory of crowdfunding. First of all, defines the concept of crowdfunding in the context of Internet finance, highlighting the values of crowdfunding. Secondly, introduces the background and causes of crowdfunding. Thirdly, divides crowdfunding into four types according to the difference of return contents and operating modes: reward-type crowdfunding, equity-type crowdfunding, loan-type crowdfunding and fundraising-type crowdfunding. Finally, clears all the participants in the crowdfunding and defines the legal relationships of all the parties in order for the theoretical foundation of the construction of the legal system of risks preventions of crowdfunding in China.The second chapter mainly describes various risks and their sources in crowdfunding. In accordance with different sources of risks, the risks of crowdfunding can be divided into risks resulting from behaviors of financing parties, risks resulting from behaviors of investment parties and risks resulting from behaviors of platform parties. Specifically, risks resulting from behaviors of financing parties include the risk of illegal fund-raising, the risk of illegal issuance of securities and the risk of project execution breach; risks resulting from behaviors of investment parties include the risk of fraud investment and the risk of infringement of intellectual properties; risks resulting from behaviors of platform parties include the risk of fraud reviews, the risk of principal guarantees and compensations in advance, the risk of abuse of precipitation funds, the risk of money launderings and the risk of divulgence of secrets. Diversified and variable risks bring a lot of uncertainties to crowdfunding and easily damage the legal rights of all the parties involved in crowdfunding.The third chapter analyzes the defects of the legal system of risks preventions of crowdfunding in China and causes. Firstly, there is no clear legislative style and legislative principle of risks preventions of crowdfunding in China, resulting the lack of a unified understanding of crowdfunding markets. Secondly, the legal supervision subjects of risks preventions of crowdfunding in China are jumbled and disorder, the phenomenon of supervisory vacuum and supervisory overlapping often happens in practice. Thirdly, the legal supervision regulations of risks preventions of crowdfunding in China seem to be thin and stiff, being unable to guide and regulate subjects of crowdfunding effectively. Finally, the post legal supervisory measures of risks preventions of crowdfunding in China have no unified performance standards and effective security systems. The reasons causing the aforementioned various defects contain the limited legislative technical and legislative level of Chinese legislatures, the indifferent legal concepts and risk consciousness of all the parties involved in crowdfunding and the level of economic development lags behind the needs of public financings and investments.The fourth chapter compares foreign legal systems of risks preventions of crowdfunding. This chapter introduces the development situations of foreign crowdfunding and well-known crowdfunding platforms, then selects United States of America, Britain, France, Italy, Japan and South Korea as samples, comparing and studying the similarities and differences of legal systems of risks preventions of crowdfunding in different countries.The fifth chapter mainly focuses on putting forward some suggestions for the construction of the legal system of risks preventions of crowdfunding in China. There are four suggestions on the basis of interpreting of the necessity of constructing the legal system of risks preventions of crowdfunding in China. First of all, clears the legislative style and the legislative principle of risks preventions of crowdfunding, insisting on the legislative style of both general laws and separate laws and the legislative principle of balancing safety objectives and efficiency objectives. This is the basis and premise for developing the risks preventions of crowdfunding. Secondly, constructs diversified legal supervisory subjects of risks preventions and joint mechanisms. On the base of establishing diversified legal supervisory subjects and clarifying the respective responsibilities, constructs the joint mechanism which communicates all the legal supervisory subjects, improving the supervisory efficiency and saving the cost of supervision. Thirdly, makes comprehensive risks preventions legal supervisory regulations of crowdfunding subjects. In view of the financing parties, designs sound credit systems, fines on faithless systems and loss compensation mechanisms, amends the relevant laws and regulations of illegal fund-raising, establishes the exemption system of public offerings of securities, encouraging and supporting the development of crowdfunding. In view of the investment parties, formulates specific investors appropriateness management rules and clears layered management principle, while strengthening the education of investors and protecting intellectual properties. In view of the platform parties, builds sound market access and exit mechanisms, mature and complete process management models, modest and prudent project review systems, efficient and transparent risks control mechanisms and fair information disclosure systems. Finally, optimizes the performance standards and the security systems of post legal supervisory measures of risks preventions of crowdfunding. On the one hand, unifies the performance standards of legal supervisory measures of risks preventions; on the other hand, perfects the security systems of legal supervisory measures of risks preventions.The conclusion section elaborates this thesis’ s innovation points, inadequacies and future research prospects in the field of the legal system of risks preventions of crowdfunding in China.