Legal Research On The Regulation Of Equity Crowdfunding

As a representative of Internet finance,equity crowdfunding has received much attention by our government,but the development of equity crowdfunding is full of twists and turns.Under the current legal framework,regulators carry out some exploration on the regulation of equity crowdfunding to make it healthy,but no significant effect has been seen.Therefore,this paper focuses on the regulation of equity crowdfunding and adopts the methods of empirical analysis and comparative reseach to reexamine the current securities legal system,so as to construct a regulatory system that conforms to the characteristics of equity crowdfunding.The main content of the text consists of the following four parts.The first part is the outline of equity crowdfunding.Firstly,defining the concept of equity crowdfunding.Then,detailedly interpret three characteristics of equity crowdfunding,namely,the Internet,the public,and small amount.Finally,introducing the development practice of equity crowdfunding,which includes that public equity crowdfunding was banned by the CSRC(China Securities Regulatory Commission)as a violation of Article 10 of the Securities Act.As well as non-public equity crowdfunding wanders between legal and illegal because of suspected of violating the rules of “specific object”and “no publicity”.The second part is legal practice of regulation of equity crowdfunding.Under the current securities legal system,regulator launched two regulation practices on equity crowdfunding successively.Firstly,regulation path of private placement,which represented by“exposure draft of private equity crowdfunding”,failed to take effect by reason of going against equity crowdfunding's characteristics-the public and small amount.Secondly,regulation path of public offering,which represented by“the guidance of Internet finance”,cannot function under the current legal system by reason of going against equity crowdfunding's characteristics-small amount of financing.In the end,concluding that the current scope of securities issuance exemption is too narrow.The third part is the legal principle of regulation of equity crowdfunding.This part firstly put forward two steps to regulate equity crowdfunding,namely,giving equity crowdfunding legal status,then regulating equity crowdfunding by exemption.Secondly,making explanation on the two steps.For the former,using the value of the rational and justice which are expressed by equity crowdfunding as a starting point to demonstrate that the legalization of equity crowdfunding is supported by natural law theory.For the latter,firstly interpreting necessity of the exemption granted to equity crowdfunding,which is based on the cost-benefit considerations.Then,demonstrating feasibility of the exemption granted to equity crowdfunding,which is based that the investors of equity crowdfunding have self-defensive ability.Lastly,pointing out that under the exemption granted to equity crowdfunding,the force of regulation dose not weaken,which presents as CSRC setting up rules of exemption and Funding Portal exercising approval authority.The fourth part is some thoughts on the regulation of equity crowdfunding.The first is top-level design of regulation of equity crowdfunding,which includes three aspects.The first one is legislative design of regulation,which is using the opportunity of amendment of Securities Law to give equity crowdfunding legal status,and setting up legal provisions of exemption granted to equity crowdfunding.The second one is concept construction of regulation,which is keeping balance between protection of investor and financing efficiency and following the characteristics of equity crowdfunding.The third one is mode selection of regulation,which is conjunction of government regulation and market autonomy.The second is building basic system of regulation of equity crowdfunding,which includes three contents.One is regulation system of issuer,which includes issuer access,limitation of amount of financing and obligation of information disclosure;The second is regulation system of Funding Portal,which includeds Funding Portal access,Funding Portal's autonomy management and obligation of information transfer.The third is system of direct protection of investor,which includes limitation of investment amounts,lead-investor system,cooling-off period system and investors relief.The third is building supporting system of regulation of equity crowdfunding,which includes establishing and perfecting the Internet credit system and constructing the profession autonomy system.