Research On Legal Supervision Of Equity-based Crowd-funding In China

As the Internet Finance is in full swing,the birth of Crowd-funding initiates a new movement.Crowd-funding is a new way of financing model,which enriches the public financing channels.Equity-based Crowd-funding is the most typical and the most complex one.In February 2010, the first Equity-based Crowd-funding platform was born in the USA,which named AngelList.Since that the platforms in the world have sprung up.They are playing a good role in relieving the financing problem of the small and micro businesses.During 2014 、 2015,the raise of the Equity-based Crowd-funding presented“blowout” in China.However,due to the lack of legal orientation and regulation,the platforms vary greatly.Combined with the characteristics of “openness, Volkswagen, small”,once there is a risk,it will cause serious influence on the funds risers、Investors and platforms.So it is important to press forward with legislation to tighten regulation of the Equity-based Crowd-funding.This article is divided into four parts:First part is about the basic knowledge of legal supervision of Equity-based Crowd-funding.As a new type of financing mode,its appearance and development rises a claim to research the legal supervision of it.Therefore, this part defines what is Equity-based Crowd-funding and why we need to supervise it by legal device.Then introduce the present that there’s no special legislation in our country,but from the policies and other relevant laws and regulations,the legislation of Equity-based Crowd-funding has been on the agenda.It faces various of risks during the development of Equity-based Crowd-funding,and it is not enough to prevent these risks by the power of participants.So strengthen the supervision of the law is the inevitable choice.The lack of legal supervision on Equity-based Crowd-funding is an inevitable reality,but our country has cleared the pace of exploration of it,and primary achievements have been published,which are represented by Regulation of Private-equity Financing(Trial)(Exposure Draft).However,it is not achieved overnight if we want to produce a perfect legal system of supervision.There are many shortcomings in these primary achievements,mainly include the imperfection in four aspects,such as supervision subject,access,risk management and exit mechanism.Above all is the main content of the second part.Establishment of the legal system should start from its own national conditions,but “act blindly” is not the right thing to do.Therefore, in this paper,the third part introduces the legislative practice in legal supervision of Equity-based Crowd-funding of several foreigncountries.Then raise analysis and summarize the advanced experiences,and hope to have a reference.All these countries include USA,in which the Equity-based Crowd-funding has developed most; UK,in which the Equity-based Crowd-funding was born earlier; Italy,which is the first country to rise regulatory rules on Equity-based Crowd-funding;and Asian countries,Japan and South Korea,which pursuit rapidly. Each of them has its strong point of the regulatory regime,which will have some enlightenment functions on designing the legal regulatory framework in China.The forth part puts forward the suggestions in legal supervision.We should perfect the local legal supervision system of Equity-based Crowd-funding from the system of supervision subject,access,risk management and exit mechanism,etc.The system of supervision subject includes clearing the supervision subjects and reasonable distribution of power and responsibility.The system of access claims different criterion of platforms,investors and fund risers.The system of risk management mainly includes compelling information disclosure,escrow system,enterprise management system after successful financing and so on.By these systems,hope reach ongoing supervision on Equity-based Crowd-funding,to ensure the healthy development of it and protect the lawful rights of investors.