Research On The Legal Regulations Of Equity-based Crowd-funding Platform

In recent Internet financing,equity-based crowd-funding has surged as a very new concept and model,which provides a more efficient and effective financing channel for start-ups and ordinary investors and triggers the attention of all sectors of society.However,under the premise of “Securities Act” and other relevant financial laws and regulations are not modified,the operation of equity-based crowd-funding must be with “illegal” color.Therefore,based on angel,certification,and membership operation model,equity-based crowd-funding platform operates with a combination of limited partnership and related investment restrictions and other measures.However,equity-based crowd-funding platform is still facing the operation risk of incomplete due diligence and false propaganda,as well as legal dilemma of disunited standards on information disclosure and imperfect audit and supervision.This thesis first introduces the concept,features,operation risk of equity-based crowd-funding,then proposes legal regulation based on the analysis of business model and the regulatory system defects of equity-based crowd-funding platform and combined with reality to improve operation rules of equity-based crowd-funding platform,so as to promote the healthy development of equity-based crowd-funding.In addition to the Introduction and Conclusion,this thesis is divided into four chapters: The first chapter first introduces the basic concepts of equity-based crowd-funding platform and analyzes its features of rapid fund-raising channel,information intermediary function,high operation cost and great responsibility,then combined with reality expounds the false propaganda,incomplete due diligence,stock holding,financing risk and other issues.By comparing and analyzing the experience of the US regulatory system,the author introduces the regulatory requirements from five aspects.The second chapter introduces the three operation model of angel,certification,and membership,and combines with the operation process of the investment platform to analyze the important aspects of investor certification,project review and offline activities in the whole activities.It also makes a detailed analysis of intermediary fees,equity returns,additional service fees,profit sharing and other profit models currently existing in crowd-funding platform.The third chapter analyzes the problems in China's equity-based crowd-funding platform and the “public offering” and “limit the number of 200” in “Securities Act” as well as the funds management system of equity-based crowd-funding platform.At the same time,the four system defects of disunited standards on information disclosure,default obligations of investor education,lack of exit mechanism and imperfect audit and supervision in equity-based crowd-funding platform also be analyzed.The fourth chapter puts forwards suggestions on the development of equity-based crowd-funding platform based on the foregoing analysis.First,modifying the “Securities Act” to a small waiver system.Second,unifying information disclosure system,setting investor education obligations and building exit mechanism of equity-based crowd-funding share.Three,improving the audit and regulation mechanism,investor protection system,fund custody and other regulatory rules of equity-based crowd-funding platform in “Regulation on Private Equity-based Crowd-funding Financing”.Fourth,connecting insurance business with the establishment of credit file and related databases and prevention and control of intellectual property rights risk and other supporting mechanisms,in order to promote the continuous development of equity-based crowd-funding platform in China and China's economic and social development.