Legal Study On Valuation Adjustment Mechanism

As an investment tool,Valuation Adjustment Mechanism(VAM)has been widely used in the capital market since it was first developed in western navigation industry.For 40 years of reform and opening-up,the development of capital market in China has experienced from scratch,gradually mature,but so far the biggest obstacle to restrict the further development of capital market in China is small and medium-sized enterprise financing difficulties and the problem of high cost of financing,financing slower,but at the same time a large number of social idle funds for investment value,the investor to avoid the risk of financing information between the both parties and then VAM used as the tool of valuation adjustment,when overvalued,financiers to give investors appropriate compensation,when the valuation is too low,the investor gives the financier a certain reward to ensure the fairness and reasonableness of the transaction.Nowadays,the VAM is widely used in the investment and financing of our country,especially in the film and television industry,where there are more and more disputes about VAM.However,at present,China lacks relevant laws and regulations on the VAM.There are still a few legal monographs on this issue,and the nature and effect of the VAM are still not clear.There are still many problems in the VAM.Therefore,this paper mainly studies and discusses the nature and effectiveness of VAM,with a view to enriching the theoretical research of VAM.This paper first introduces the concept and characteristics of the VAM,combs the legal relationship of the VAM from the aspects of subject,content and object,and analyzes the necessity of the VAM in our country at the present stage.Then it points out the status quo of judicial practice of our country's VAM,that is,the lack of relevant legislation,the irrational signing of VAM by investors and financiers,and then analyzes some legal problems existing in VAM,including the existence of disputes over the nature of VAM and the existence of validity disagreement and supervision need to be perfected.I discuss the nature of the VAM in detail with the angle of jurisprudence,and comments on the various theories at present.I argue that the nature of the VAM should belong to the nameless contract,The VAM should be included in the scope of a well-known contract,Set the VAM to be a " Valuation Adjustment contract" by the legislation to reshape the nature of VAM.Due to the imperfect system of preferred stock,convertible shares and convertible bonds,we can only adjust the investment valuation with the tool of the VAM.In my opinion,it is not advisable to deny the effectiveness of the VAM.We should respect the VAM signed by the investment and financing parties,the state should make clear the legality and validity of the VAM through legislation,and construct a perfect legal system.At the end of the article,I propose to improve the supervision of the VAM from three aspects: the establishment of an IPO audit negative list,the improvement of the information disclosure system,and the development of contract model texts.