Legal Research On Valuation Adjustment Mechanism

Valuation adjustment mechanism on a new concept in recent years in China’s capital market, it is not, as some view the incoming call from abroad, an valuation adjustment agreement is actually under the unique environment of high financial regulatory and shareholder Centrism China has produced a distinctive concept. With the valuation adjustment mechanism more and more widely used in the field of investment and financing, the legal issues related to the debate are more intense.Although valuation adjustment mechanism legal nature has not been defined authority of the judiciary, but I think these traditional gambling contract agreement with the guarantee contract, loan contract, aleatory contracts and conditional contracts are different, should be attributed to valuation adjustment mechanism atypical contract category, in judicial practice, it should be treated as a nameless contract, which provides a more relaxed legal environment for the use of the valuation adjustment mechanism will help further the rapid development of capital markets. Since the "China’s first case of valuation adjustment mechanism "- since Admiralty case, there are a lot of valuation adjustment mechanism disputes arise, there have been more different from the court’s decision, its effectiveness should refer to what law applies there is no clear regulations, and therefore its legitimacy has been questioned. By analyzing the court’s basic ideas and values, we can see that the concept of the trial court, whether it is considered in violation of the valuation adjustment mechanism "investment in the field of risk-sharing" principle, or harm the interests of the company and creditors, are basically from fair idea of the angle of departure. However, among the fair and equitable civil law commercial law, which is to have a different meaning and application objects, it should be treated differently.As the current emerging market countries, despite some difficulties in the development ushered in a rare market opportunity, while the development of history from mature markets private equity fund draw valuable experience, but due to different national conditions, characteristics of different regions, more or less facing the country and problems. In order to ensure valid valuation adjustment mechanism, the author will analyze the stage presence of imperfect relevant laws, lack of institutional credit and other risks. As well as investment and financing from both angles risk analysis should take preventive measures, investors can also invest in the presence of directors and supervisors take the set or "veto power" approach to investments to be monitored; investee in signing the agreement should also pay attention to valuation adjustments set exclusivity clauses, anti-dilution provisions and the terms of the repurchase, to reduce investment risk and management. Finally, the author again from a macro perspective put forward suggestions on the legislative and judicial systems, improve the relevant legal system, the government actively guide, the establishment of a multi-level market. We believe our valuation adjustment mechanism in the future there will be more relaxed in the capital markets and broad space for development, play an increasingly important role.