The Legal Supervision Of The VIE & Control Agreement Mode

Chinese capital market financing channels narrow problem has been plagued by small and medium-sized,entrepreneurial enterprises.Domestic enterprises listed overseas must go through strict examination and approval of the Commission and other relevant departments,the process is complex and operational difficulties.Part of the industry related to the national social and economic security and stability,the state restricts or prohibits foreign investment.Under the combined effect of these factors,VIE & control agreement mode has become the inevitable choice of some enterprises in China.VIE & control agreement mode is complex and fragile structure,and the nature of legal supervision circumvention in China takes a huge legal risk.In recent years,China's capital market gradually improved,the clear regulatory signal of the relevant departments releases,making some enterprises choose to dismantle the VIE & control agreement mode,but there are still many companies choose VIE & control agreement mode to achieve overseas listing case.Based on the current VIE & control agreement mode and the market environment,this paper comprehensively analyzes the internal and external legal risks of the VIE & control agreement model,and discusses the supervision and improvement of the VIE & control agreement mode from the perspective of legal risk control.The first part of this paper sort out the basic concepts and categories of the "VIE & control agreement mode” firstly from the legal and financial point of view;secondly introduce the analysis of China's VIE & control agreement mode development background and the current situation,and finally through operational processes of the recent VIE & control agreement mode examples,deeply analyzes the internal structure of the VIE & control agreement mode.The second part of this paper deeply analyzes the legal risk of VIE & control agreement mode based on the analysis the concept and structure of VIE & control agreement mode in the first part.Firstly,it analyzes the external risk of legal supervision of VIE agreement control mode,including the legal risk of overseas listing supervision and the legal risk of foreign investment supervision.Secondly,it analyzes the internal risk of the VIE & control agreement mode protocol,including the contract risk of the control agreement and the moral hazard of the parties to the agreement.Finally,on the basis of discussing the legal risk,this paper puts forward the source of the legal risk of VIE agreement control mode: lack of perfect foreign listing supervision system and foreign investment management system.The third part of this article is the introduction of foreign VIE agreement control mode.Hong Kong,the United States is the main destination for overseas listing of Chinese enterprises.This section describes Hong Kong and the United States on the supervision of the VIE agreement control mod,analysis and summary of overseas advanced regulatory experience.On the basis of the foreign experience of supervision,combined with the reality of VIE & control agreement mode,the fourth part of this paper puts forward the improvement of VIE & control agreement mode.China's control of the VIE & agreement control model should first proceed from the regulatory concept of change,to establish a guide to the main,to the real supervision,market-oriented moderate intervention in the regulatory concept.Secondly,in the specific content of the regulatory system,we should proceed from the establishment of overseas listed supervision system,appropriately reduce the listing requirements,simplify the process,speed up the reform of the registration system and so on,improve the securities market supervision system;In the aspect of foreign investment supervision,it is necessary to further clarify the control standards,establish long-term foreign-funded industry guidance planning,improve the foreign investment supervision system,pilot the dual ownership structure in the field of foreign investment,and relieve the contradiction between foreign investment and national security and stability.