Discussion On Qualified Investor System Of China’s Private Equity Securities

At present, numerous enterprises are facing such a situation of financing difficulty while large number of non-governmental funds are hard to be financed. Moreover, to dredge the channels of circulation of funds only through the existing national open market can hardly meet such requirements. As a new way to solve the problem of financing difficulty, securities private placement, compared with securities public offering (such as IPO) or bank credit financing, is of the advantages of less transaction cost, shorter publishing time, manageable financing cost and less subsequent supervision, and hence attracts various funds and investors. But securities private placement has been wandering between the facts and norms under the financing suppression and regulation prevailing in our country without solid legal basis. Securities regulatory authorities should moderate the regulatory requirements of private securities issuers to reduce the information disclosure obligation of issuers. In that way, investors shall be able to analyze and deal with the investing risk of securities private placement with a relatively stronger investing ability. Thus, in securities private placement activities, how to improve and perfect the system for the approval of qualified investors in securities private placement does become extremely important. Although we have set statutory conditions for qualified investors so far, a unified and scientific operation standard still awaits to be set. That’s why scientifically set a unified standard for the approval of qualified investors is of paramount importance in improving and perfecting activities of such system. Learning from UK, US and Japan, different qualified investors shall be distinguished and for whom different standards shall be set and different amount of the qualified investors shall be limited. Besides, the set of relative procedures for the approval of individual qualified investor is also the practical needs of protecting investors, improving and perfecting legislative regulation and promoting the development of securities market.