The Present Situation And Risk Prevention Of Equity Pledge In China's Listed Companies On The LeEco For Example

Since the start of the bull market in China in 2014,the scale of equity pledged has increased rapidly with equity pledge market prosperity.And in 2015,half of the stock market limit,many listed companies fell,facing the situation of forced liquidation,and the transfer risk of shareholder's control also broke out,and China's securities market also has the possibility of outbreaking systemic risk.The pledge of equity can transform the shareholders' equity into dynamic cash flow,realizing the capital circulation and solve the problem of shortage of funds.It has the advantages of simple operation,low cost of financing and wide use of pledged funds.With China's economic cycle in the downward trend,the company needs capital and equity pledge scale grows.However,China's regulatory measures are not perfect with the lack of specific and feasible regulatory norms and there is a great risk of equity pledge,which is not only related to the vital person and the pledge of the vital interests,but also on the stability of the entire capital market.We can get the public market price and the pledge information of the listed company from the stock market.Therefore,this paper will study the impact of the equity pledge on the market value of the listed company and the risk brought by the equity pledge from the perspective of the equity pledge of the listed company in our country and put forward the policy recommendations to improve the risk of equity pledge.This paper firstly introduces the development background and significance of the equity pledge system.Secondly,it introduces the concept of the pledge of the equity pledge,the characteristics of the effect and the development of the equity pledge system.Then,the paper analyzes the development of the equity pledge market in China and the characteristics of the real estate.Then it analyzes the risk characteristics of China's equity pledge,combined with the listed company LeEco.Finally it puts forward the policy recommendations for the existence of various risks,combined with China's securities market characteristics,from the perspective of the investors,mortgagees and regulators.