Research On The Legal System Of Equity Crowdfunding In China

Equity Crowdfunding owns both long history of development and connotation of new era. As a combination of internet and finance, the main feature of crowdfunding is to raise a small amount of capital from a large number of investors. Start-ups and SMEs often face the inability to raise capital to progress to the next stage. The crowdfunding industry will not only help bridge the capital gap, but also create new access for the crowd with spare cash to investment. However, the legal character of equity crowdfunding was debatable when it is yet to take off. After investigation of equity crowdfunding market, Chinese authorities now begin to explore new rules for equity crowdfunding. The legislation contributes to the argument of equity crowdfunding, private equity financing and private fund. A wide variety of risks are along with the fast development of equity crowdfunding, which means a great demand of regulation. In fact the legislation lags far behind the development of crowdfunding industry, and there have been various problems in practice, including judicial cases. The legislation at present is still confined to the definition of equity crowdfunding.This project will explore how to regulate equity crowdfunding in China from the normative perspective. It will begin with the argument of the significance of crowdfunding and risks concerning investors, fundraisers and platforms. The second part will analyze the demand of further laws and regulations. In this part, it will provide an overview of the existing legal framework which involves restrictions and the new legislation process. This research will adopt the comparative study to describe how different entities have approached equity crowdfunding, including Australia, America and the EU. The final part proposes to create the safe harbor of equity crowdfunding. On one hand, it suggests that the legislator should improve the exemption rules. On the other hand, it is necessary to propose separate regulation from the perspective of fundraisers, investors and platforms.