A Study On The Legal System Of Dual-class Share Structure System In China

The founders of Alibaba,Jingdong and other private enterprises got their companies listed in the United States one after another in order to maintain the control of the companies in the financing process,which triggered academic discussions on the dual-share system.In fact,since 2013,the State Council and the China Securities Regulatory Commission have successively issued pilot guidance and management measures for preferred stocks.At the beginning of 2019,the CSRC announced the “Regulations on the Registration of Initial Public Offerings of the Science and Technology Board(Trial)”.According to this method,the technology companies allowed the issuance of special voting rights in the initial public offering.Prior to this,the Shanghai Stock Exchange issued the The listing rules for the special voting rights of the board Change of China's attitude towards dual-class share system from the previous strict prohibition to the current open attitude has once again intensified the heated discussion of dual-class share system from all walks of life.With the continuous development of the financial market and the increasingly diversified demands of shareholders,it is an inevitable topic whether the one-share-one-vote system pursued by our country should be replaced by the dual-share system.This paper aims to prove that under the general environment of "deregulation and strengthening supervision" of China's capital market,dual-class equity system should be allowed conditionally.Besides Introduction this paper consists of other three parts.The first part analyzes the legal connotation,features,necessity and feasibility of dual-class share structure in China,and expounds the theoretical and practical basis for the application of dual-class share structure in China and the provisions of article 3 of the securities law(amendment draft).The paper argues for the necessity of dual ownership system from three aspects: low decision-making efficiency,heterogeneous shareholders and lack of autonomy space caused by indifferent exercise of voting rights by minority shareholders;This paper demonstrates the feasibility of dual ownership structure from four aspects: the existence of legislative space introduced by the system,the further improvement of the market environment,and the fact that the structure of one share and one right cannot meet the needs of listed companies and public investors.In the second part discusses the practical modes of the dual-share system outside China and the institutional innovation of Alibaba Partnership.After analyzing different rules on dual-share system in different countries,it proves from a practical perspective that the financial market needs the dual-share system.By combining with foreign legislation and experience in the dual-share system,it provides a reference to the introduction of dual-share system in China.The third part analyzes the obstacles in implementing the dual-share system in China,including the lack of market maturity,corporate governance defects and the lack of investor protection system,and puts forward related suggestions.Firstly,incorporate the dual-share system into the rule of law by referring to the path of preferred stock.Secondly,design listing rules including limiting the applicable objects,range and scope of the over-voting shares and clarifying the acquisition mode of the over-voting shares;Third,strengthen the information disclosure system,improve the class action system,and strengthen the supervision by regulatory authorities,hence,establishing a correspondingly sound institutional arrangements for protection of small and medium-sized investors.