Legal Regulation Of Private Financing Order In China

Since the reform and opening to the outside world,China has gradually changed from planned economy to market economy.As an important part of non-public ownership economy,China's small and medium-sized enterprises have developed rapidly and their business scale has been expanded.In the continuous development needs to raise large amounts of capital and growth process,but because the formal financial institutions to the state-owned banks as the representative of the loan procedures cumbersome,long cycle,the high threshold of lending and investment preferences and other reasons,more and more small and medium-sized enterprises and individual businesses to obtain formal banking financial support,the development,the problem of financing has been plagued by small enterprises and individual businesses at the same time,the folk financing mechanism into the public eye.Such institutions have the characteristics of convenient lending procedures,low threshold and short lending cycle,which can meet the needs of small and medium enterprises and individual merchants for short-term funds,and also increase the utilization rate of idle funds.In this context,the folk financing institution in China is rising rapidly and become small and medium-sized enterprises and individual business households strong pillar to solve the capital problem.Private capital entering the modern financial service industry is not only an important way for the traditional economic restructuring and expansion of financing channels,but also a new normal for the reform of the financial industry and the initiative to adapt to economic development.With the prosperity of the market economy,the phenomenon of domestic private financing is increasing day by day,and the scale of financing is expanding day by day.The initial stage of the development of private financing market has brought some positive effects on the socialist market economy,and indirectly promoted regional economic development.But due to the lack of relevant legislation,the lack of supporting system of financial supervision,the current private financing institutions of our country flood,folk financing disorder,lawsuits,mass incidents caused a significant impact to people and property safety,will affect the domestic financialorder if things go on like this and the stability of social order.The topic is selected based on the existing literature and the analysis of economic data on the part of the area,combined with the stage of folk financing in China's actual situation,discusses the encountered obstacles in the process of development of private financing,and then on how to standardize the financing order in our country,put forward the corresponding countermeasures to promote private finance industry development.The first part of the article explains the basic theory of private financing.Folk financing refers to financial institutions in the country legally,between natural persons,legal persons and other economic subjects to obtain high interest and the right to use the funds and pay the financing contract interest,the main form of private lending and internal funds.With the continuous progress of scientific and technological means,Internet applications are becoming more and more widespread,and private financing is gradually showing new features,such as diversified forms of financing,diversified sources of financing sources,hidden financing flows and so on.Secondly,confirm the folk financing activities in the legitimacy of the legal level,private financing is legitimate financing behavior in accordance with the people's Bank of Chinese credit policy,different from the illegal fund-raising act of disrupting financial order,it broke the monopoly status of bank credit,the introduction of competition mechanism in the financial markets,reduce the cost of market financing,to raise funds use efficiency.At the same time,it also helps to improve the integrity of our system,and indirectly promote the development of smes.The second part first analyzes the problems faced by private financing at this stage.The main problem is that private financing institutions,frequent flooding,financing risk,financing fraud victim rights difficult;secondly analyze the causes of the folk financing order at this stage is mainly chaotic,the absence of the regulatory body,the use of funds is opaque,there is a conflict between the lack of risk prevention mechanism,the existing law.The third part analyzes the relevant laws and regulations on private financing in some western countries,such as Japan,Britain,Germany,the legal regulation on private financing,combining our country's actual situation and the legislative statusquo of private financing,to perfect the legal regulation of private forms of financing in China provide a useful reference,such as the financing program,the rate of return in detail the regulations,to provide theoretical support for the development of the financial environment in order to standardize the financing behavior and local optimization.The fourth part is the proposal to improve the legal regulation of private financing order,which is also the focus of this article.Based on the existing legal system,should be clear about the folk financing organizations to determine the regulatory body,regulatory responsibilities,the post review into prevention,limit the regulation right of supervision,regulation and law enforcement supervision authority behavior,given the subject of rights are illegally infringed is entitled to administrative power relief and judicial relief;followed by regulatory authorities and their staff must have the corresponding supervision;finally should formulate supporting financial measures,establish and improve the market access system;establish and improve the market exit mechanism.In order to standardize and guide the healthy development of private finance under the premise of the introduction of social insurance,which can reduce the financing process of all parties to the economic risks,in particular,to protect the interests of investors.In economic activities,only the interests of all parties in the legal level can be effectively protected,in order to promote the healthy development of the industry as a whole.The existence of private finance industry is a double-edged sword for the development of the domestic economy at this stage,one can resolve the small and medium enterprises and individual business households financing problems,improve the utilization rate of idle funds in the society;on the other hand may also be on the economic order,social order and stability threat.Private financing institutions have institutional loopholes in private financing activities,the lack of effective examination means,can easily lead to the financing of the funds can not be recovered in time,damage to the interests of investors;or in the case of funds can not be recovered in time,through violence,threats and other illegal means to extort money,harm the social security.This paper argues that to promote the healthy development of privatefinancing industry,first solve the lack of legislation,lack of supervision issues in the legal level,the system level to solve the program vulnerabilities existing in the financing;then a correct understanding of folk finance complement to formal finance,the offside private financing activities to improve the relevant legal system and external supervision and restraint mechanism specification the regulations and the appropriate guidance is the right choice to promote the development of private financing.