The Legal Regulation Research About The Outside Funding In Securities Trading

The outside funding activity in securities trading is a unique phenomenon in our country but rarely abroad. The outside funding activity in this article refers to the narrow sense of the outside funding activity. It consists of terms with funding companies, innovative Internet technology, securities trading channels and so on, to form the model“ security account + HOMS + funding company + investors”. This article through introducing the general situation of the outside funding, and analyzing its main modes and internal law relationships, reveals the risks and current situation of supervision about the outside funding. On this basis and combined with foreign regulatory experiences, author energetically explore perfect legal supervision systems and put forward some suggestions.This paper is divided into four parts:Part 1, it introduces the outside funding profiles. Firstly, defined the concept of the outside funding, and noted that the current concept is not authoritative definition, the author divided the outside funding into two sides, broad and narrow. The object of this study is narrowly outside funding, the research scope is the Internet and private with capital. Secondly, the outside funding activities, including diversified capital-funded company, technology dependent, the main features of highly leveraged transactions, and then analyzes the legal relationship between the borrowing of funds, deposit guarantees and trust with the capital took place in the activities. Finally, summarize in the securities trading the outside funding activities play an active role in China’s capital markets, embodied in three aspect, such as an active capital market to facilitate corporate financing; increase stock liquidity, optimize the allocation of resources; broaden the investment channels for investors.Part 2, it describes the main path and the legal basis for the outside funding. The outside funding was able in a short time with capital formation concealment highly leveraged fund, and have a huge impact on the stock market, depends on the implementation of a variety of paths, the path is divided into basic and derived path. The various funding path is not completely unregulated state, its existence and evolution have some legal support, such as the forced liquidation rights established by law, and in the process of funding involved some legal facts, such as funds borrowing, guaranty,and accounts borrowing are ruled by the "Contract Law", and "The Guaranty Law".Part 3, from various aspects about the outside funding, such as funding company, technology company, capital provider, and regulator, author analyze its possible problems in the activities of the outside funding. In the face of these risks, our supervision will show many shortages.Part 4, author propose the legal supervision of the outside funding of China on the basis of drawing lessons from the experience of foreign financial supervision: First, China’s regulatory authorities should change the concept of supervision of the outside funding, change "strict block" as "grooming" and change "forbidden" as "standard". Second, I think, the funding company should be incorporated into the regulatory scope of the China Banking Regulatory Commission in legislation, and the China Banking Regulatory Commission regulate the company’s market access conditions and business activities in the form of departmental rules and regulations. We should strengthen the identification of criminal acts of funding company in the aspects of judicatory judgment. Take a variety of measures in law enforcement, strengthen the comprehensive enforcement of the outside funding, and avoid the absence of regulation. Perfect personal credit system, set funding customer access threshold, strengthen the education of investors, and perfect the innovation standard of financial technology and the supervision system of China’s financial market.