Research On The Legal Supervision System Of Equity-Based Crowdfunding In China

As a new type of financing model,equity-based crowdfunding is an important driving force to mass entrepreneurship and innovation.On the one hand,equity-based crowdfunding can effectively alleviate the financing difficulties of small and micro-enterprises.On the other hand,equity-based crowdfunding provide average investors the opportunities to involve in equity investment directly,which can effectively promote the development of multi-level capital market.However,there are still no laws formulated for equity-based crowdfunding in our country equity-based crowdfunding is still in the gray area of legal regulation.In the existing legal norms,such as the "Securities Law" and the “Company Law ”only made principled stipulation to equity-based crowdfunding,the specific provisions of equity-based crowdfunding mainly exist in the normative documents which made by CSRC(China Securities Regulatory Commission)and other departments,however,these documents basically did not make supervision rules to equity-based crowdfunding.At the legislative level,the supervision system of equity-based crowdfunding mainly defects in the unknown of responsibility of the supervisory authority,unreasonable access system and lack of exit mechanism of investors,unclear positioning and unclear obligations of the platform.In practice,there are some problem in the supervision of equity-based crowdfunding such as inadequate disclosure of information and financial security can not be effectively protected.These problems seriously influence equity-based crowdfunding's development in our country.The legal regulations of equity-based crowdfunding in each country are different.The United States established the legal status of equity-based crowdfunding through enacting the “Jumpstart Our Business Startups Act”,the bill egards the information disclosure as the core of the regulatory system to strengthen the protection of investors.The UK stipulate that equity-based crowdfunding is only available to specific investors,the characteristics of its supervision system are established investor eligibility system and strengthened supervision of the platform.There are significant differences between the UK and US models,but their similarities are classified investors and regard information disclosure as the primary means of regulation.The mature supervisory experience of equity-based crowdfunding in foreign countries have some enlightenment to our country to strengthen the supervision of platform and improve the information disclosure system.To perfect the supervision system of equity-based crowdfunding in our country,first,the subject of the regulation and its duties should be clearly defined.Second,the access and exit mechanism of investors should be improved.Third,strengthen the supervision of the platform,the key is to define the legal status of the platform accurately,then standardize the platform obligations,supervise the platform with a hierarchical regulatory model and strengthen the industry self-discipline management.Fourth,from the perspective of financier and platform to enhancement information disclosure system.Finally,through making rules that investors can withdrawal capital,funds are managed by third parties,and introduction of insurance systems to fully protect the security of funds.