Research On Legal Regulation System Of Chinese Equity Crowfunding

As a crucial achievement of internet financial innovation, equity crowdfunding is under rapidly development currently, effectively relieving the financing difficulties of medium small and micro-sized enterprises and offering new financing channels for investors. Moreover, equity crowdfunding has greatly promoted the substantial economy and already become an important route for enriching China's multilevel capital market. However, as a new thing, equity crowdfunding is not only promoting the development of internet financing, but also facing a series of risks, such as default, operation failure and fraud, which could cause loss to investors' vital interests, and also have an impact on the stability of our financing order. Hence, an impeccable legal regulatory framework is becoming indispensable. However, Securities Law publicized in 2005 dose not have related regulations, and the Regulations for Private Equity Crowdfunding Management(exposure draft) is also deficient. Therefore, it is imperative to study the related legislation of foreign countries and complete China's legal regulatory framework of equity crowdfunding. Based on this purpose to study and contribute to the perfection of the associated legal system, this paper includes 5 chapters as below:The first chapter mainly introduces the basic theories of equity crowdfunding. Based on the detailed analysis on its concept and features, the subject of legal relation and operation procedure are explored, and the functions are demonstrated.The second chapter, taking the example of real case under the background of the rapidly development of crowd-funding in China, analyzes the risks during the current crowd-funding process, including risks of compliance, fraud, breach of contract, asymmetry information, operation failure and equity transfer, etc.The third chapter, combined China's Securities Law, Regulations for Private Equity Crowdfunding Management(exposure draft) and Instructions for Promoting the Healthy and Rapid Development of Internet Financing, deeply explores the deficiency of related legal regulatory framework, such as the deficiencies in exemption stipulation of equity crowdfunding release, the regulation of crowd-funding platform and the financing behavior of project sponsors, the market access system of investors, the protection of investors' rights, and the liability system of related laws.The fourth chapter, mainly analyzes the JOBS Act of US, The FCA's Regulatory Approach to Crowd-funding over the Internet and the Promotion of Non-readily Realizable Securities by Other Media of GB, and Financial Instruments and Exchange Act of Japan, of which the legal regulatory framework of crowd-funding is compared and studied, and the legislative experience is summarized as well.The fifth chapter puts forward some suggestions for the legal regulation and supervision of China from the perspective of its basic principles and specific rules. Based on the principle of balance between pursuit of efficiency and security guarantee, the match between system transplanting and localization, and combination of proper supervision and innovation supervision, the exemption system should be established, the supervision on platforms and issuers should be enhanced, the market access system of project investors should be set up, the protection system of investors' rights and legal liability system of crowdfunding should be completed, in this way to better promote the orderly development of equity crowdfunding.