A Study On Legal Regulation Issues Of Equity Crowdfunding

Equity based crowd-funding has become a new field of Internet financing forms and stands at the forefront of the investment banking business.it plays a important role and of great significance in stimulating the vitality of the finance markets.Because of the advantages of “low cost,open and simple process”,Equity based crowd-funding not only solved the financing difficulties for micro,small,medium-sized companies and start-ups,but also activated the investment demand of entrepreneurs and investors,and optimized the allocation of capital.Although continuously gaining widespread social attention and recognition,equity based crowd-funding in practice has also encountered a series of problems,especially when the relative supporting laws,given its hysteretic nature,is not in place,which severely hindered its development.This article is intended to analyze the development status of Equity-based Crowd-funding,the legal relationship between main participants(investor financiers and Equity Crowd-funding platforms)with the successful regulation of Britain and the United States on the basis of balancing economic benefits and protecting investors,consequently,some suggestions are put forward to further improve the legal regulation of the Equity Crowd-funding in China.Apart from the introduction and conclusion,this article is divided into four parts:The first part is an overview of Equity Crowd-funding,this article mainly combines the basic concept of equity and the operation mode,it introduces the equity's main participants and analyze the raise of civil legal relationship,and summarizes the development background and present status of China's stake in the raise,aims to provide the theoretical basis for the study of the Equity Crowd-funding.The second part is to analyze the main legal problems of the three participating subjects in practice:investors do not fully enjoy the right to know about the project,investment information asymmetry and the process mechanism of exit investment is not perfect and convenient;financiers facing suspected illegal fund-raising and their intellectual property is liable to be plagiarized;the rights and obligations of the Equity Crowd-funding platform are not clear and there is no uniform standard and the two sides are not serious enough.These problems need to be solved and perfected by corresponding legal regulationsThe third part through outlines and analyses the health development of the two countries(UK and the USA)to encourage Equity Crowd-funding.Both the USA's <JOBS> and the UK's < Regulatory Rules >classify investors by income with setting up the obligations of financiers and crowd-funding platforms to minimise the barriers to entry for investors,and they have certain reference significance to our countryThe fourth section shows how to build investor protection system,establish and improve the exit mechanism,improve the information disclosure of the financiers,intensify intellectual property protection,implement the registration system for Equity-based Crowd-funding platforms and the establishment of a crowd-funding system and establish a small exemption distribution system,an official and private sector self-regulatory organization on the basis of the successful regulation experience of the United States and UK.In this way,we improve our country's unsound Equity Crowd-funding mechanism.