Study Of Legal Mechanisms Protecting The Interests Of Equity Crowdfunding Investors In China

Equity crowdfunding has become a popular form of investment in both China and the rest of the world in recent years.Althouth the Securities Association of China has issued experimental Regulations of Private Equity Crowdfunding in December of 2014,and there have since been frequent publicated guidelines and opinions from top officials,up till now China has no institutionalized mechanism protecting the interests of equity crowdfunding investors or relevant legal documents of higher level,showing a state of insufficiencies of legal regulations that calls for more research.This study starts with the concept and characteristics of equity crowdfunding and the practice of China's equity crowdfunding,and the existing lack of existing laws.This study goes on to discuss the legal reasons underlying the above problems,and suggest the current insufficiencies in the protection of equity crowdfunding investors including lack of legality foundation,insufficient platform entry regulation,unclear definition of qualified investor,missing third-party operational regulation and incomplete social credit system.Targeting these insufficiencies,this study then discusses and analyzes the Jumpstart Our Business Startups Act of the United States,the FCA's regulatory approach to crowdfunding over the internet and the promotion of non-readily realisable securities by other media of United Kindom,and the Ordinace on Participatory Investment of France in an attempt to find out other countries' legal solutions for similar problems.Finally,based on the above analysis of the current status in China and problems therein,as well as related legislative practices in other courtries,this study proposes measures for improving the protection of equity crowdfunding investors by both improving current legislations and establishing relevant regulations and systems,with the later covering entry regulations governing equity crowdfunding platforms,clear definitions of investors' investment authority,establishment of complete regulatory system,establishment and improvement of social credit system.