| The development of finance needs perfect investor protection institutions in order to govern the opportunistic behavior against the interests of investors and improve the willingness of investors to trade.The theory of law and finance points out that improving the level of investor protection requires a complete legal institution,and whether there is a more complete legal institution is an important factor to measure a country's financial development environment.Developed countries adapt to the financial development through continuous legislation and legal revision,one of the main differences between developed countries and transition economies is whether there are legal rules to define damage behavior accurately and efficient judicial system.But in any legal system,there are some problems,such as lack of rules,unclear application boundaries,etc.the law enforcement will also be affected by factors such as the difficulty of evidence collection,professional ability,judicial independence,etc.And the dynamic characteristics of financial development,the verifiability standard of law enforcement evidence and other characteristics also determine that the law is inherently incomplete.It is difficult to achieve the goal of efffectively governing financial contracts and protecting the interests of investors only relying on legal institution.The inherently incompleteness of' law provides action space for investor protection mechanism beyond lagel institution such as private governance and financial regulation.But at the same time,there is interaction and feedback between legal institution and various organizations that provide private governance and market regulation functions.The existing legal institution provides the most basic framework for investor protection,in which various investor protection mechanism cooperate and play a role.Therefore,studying the performance of various investor protection institutions from the perspective of the completeness of the legal institution can not only explore which investor protection institution are available for selection under the incomplete law,but also analyze the mechanism between the legal institution,private governance and financial regulation,and explore how to form a coordinated and relatively perfect investor protection system.As a new financial product,investment-based crowdfunding can be divided into equity-based crowdfunding and debt-based crowdfunding,and it has gone through the process of rapid development,incessant chaos,cleaning up and shrinking in China.Observing its development process,it is a process from development to failure in the state of incomplete law,but in which private governance and financial regulation have also made corresponding efforts.Taking the development process of investment-based crowdfunding in China as the research object,based on the incompleteness of law theory,this paper analyzes the investor protection performance and the interaction of legal institution,private governance and financial regulation in an institutional environment of incomplete law,shows the restriction of the law completeness on the performance of private governance and financial regulation.Finally,this paper use the experience of China's investment-based crowdfunding to verify and promote the incompleteness of law theory.The basic findings are:In the institutional environment that the incompleteness of law is significant,in order to protect the interests of investors,the platform governance and local financial regulation of China's investment-based crowdfunding have played an important role,but their performance of investor protection has been seriously restricted by incomplete law.The lack of supply of investor protection institutions eventually led to the rapid development of China's investment-based crowdfunding to rapid decline.Specifically,the main research contents and conclusions are as follows:Firstly,the theoretical analysis of the mechanism between legal institution,private governance and financial regulation.In the institutional environment of incomplete law,the third-party governance of private governance is a rule-based governance mechanism when the scope of transaction is expanding and the uncertainty of the trading partner is increasing.Through a certain degree of hierarchy,with the help of management control means,the third-party governance can improve the coordination and adaptability of contract execution,but it needs to operate under the shelter of mandatory legal institution.Law is the bottom line and threat point of private negotiation,and the opportunistic behavior of the third-party organization should be regulated by law and regulation.Financial regulators can maintain the market order through the exercise of residual legislative power and active law enforcement power under the condition of the incompleteness law and the market failure.However,the space of regulatory power and the authorization,independence and regulatory resources of regulatory power allocation need to be protected by more complete laws.In the long run,the completeness of law is the key to restrict the performance of all kinds of investor protection institutions.We need to take improving the completeness of law as the core and promote the law,private governance and financial regulation together to form a perfect investor protection system.Secondly,the performance of investor legal protection under the incomplete law.The lack of legal rules,vague boundary,high cost of damage behavior confirmation and other legal incompleteness factors weaken the contractual governance function of lagel institution.Investors can't form stable expectations for the court judgment,Judges also over enforce or under enforce the law due to the lack of clear legal rules,which makes law difficult to effectively deter damage behavior.Whether there is a complete law is the main difference between China and developed countries in the field of investment-based crowdfunding.Countries such as Britain and the United States have improved the adaptability and completeness of laws to financial development by incorporating investment-based crowdfunding into existing financial laws such as the securities law,but China has not made relevant legislation and legal amendments,and crowdfunding is only subject to basic legal norms such as contract law and tort law.These laws can not accurately define the responsibility of information disclosure of crowdfunding financiers and platforms,which leads to different judges adopting different judgment standards,and it is not conducive to investors.Based on the data of the judgment of false disclosure disputes in China's equity-based crowdfunding,this paper studies the impact of incomplete law on the court's law enforcement,and finds that the incomplete law makes it difficult for investors to confirm the specific damage behavior and determine the object of infringement,and the judgment is not conducive to investors as a whole.Thirdly,the performance of private governance under incomplete law.Under the restriction of the established legal institution,the market subjects will choose the corresponding governance structure under the motivation of minimizing transaction cost.Third-party governance is an important rule-based governance mechanism.To a certain extent,the third-party organization can play a role in making transaction rules and maintaining market order,but its effect is subject to the completeness of law.In the investment-based crowdfunding,platform governance is a special third-party governance,which takes platform enterprises as the main body to reduce the opportunistic behavior of users in the platform market.The law incompleteness premise of China's investment-based crowdfunding determines that crowdfunding platform needs to undertake more functions to promote contract execution,which is more efficient than investor self-protection.Taking the civil litigation of borrower's breach of contract in China's debt-based crowdfunding as the object,the empirical research finds that platform relief has more time and money efficiency advantages than investor's self-help relief,which shows that platform governance has certain advantages.However,the platform governance still needs to operate under the shelter of more complete law,and the platform also needs to be subject to the external regulation of law and regulation.When the incompleteness of law is very high,the ability of platform governance to deal with uncertainty is very limited,and even fall into the failure state of platform governance.The empirical analysis of the overdue rate data of China's debt-base crowdfunding platform proves the above judgment.The research shows that the overdue rate of the platform will rise significantly when the market risk increases and the uncertainty of contract execution increases,which seriously affects the trading order in the platform market.This shows that it is difficult for platform governance to play its role independently from the complete law.Fourthly,the performance of financial regulation under the incomplete law.When the standardization cost of damage behavior is low and the negative externality loss caused by it is high,the residual legislative power and the active law enforcement power can be allocated to the regulators,and the information gap between the regulators and the market can be reduced,the supervision ability can be improved,and the market failure can be corrected through the allocation of regulatory power.However,with the development of finance,the residual legislation and active enforcement of the regulators must be based on the definition of legislation,and the efficiency of the allocation of regulatory power also needs to be guaranteed by law.China's investment-based crowdfunding is in the central and local two-tier financial regulatory system,and the local financial regulators become the main body of regulatory responsibility.By further making the expanded rules based on the central regulatory rules,the local financial regulators have exercised the residual legislative power to the maximum extent and reduced the cost of active law enforcement.Gathering up the extended rules formulated by local financial regulators in China's debt-based crowdfunding regulation,it is found that the extended rules can significantly promote the scale of crowdfunding transactions and help to control market risks,especially in areas with lower legal constraints and higher market-oriented level.In addition,the self-discipline regulation of industry associations can also help alleviate the negative effect of completeness law on regulatory capacity.However,the power and responsibility of local financial regulation lacks the basis of superior law,and the power allocation is too extensive,which seriously restricts the ability of local financial regulationTo sum up,a basic conclusion is that in the institutional environment with incomplete law,private governance and financial regulation can replace the legal institution and protect investors in the short term,but in the long term,the protection effect is seriously restricted by the incompleteness of law.A perfect investor protection system must be based on the improvement of the completeness of law,and all kinds of investor protection institutions work together.This is particularly important for emerging and transition economies with more incompleteness of law.In order to make the progress of rule of law play a better role in promoting financial and economic development.Firstly,in the short term,because it is difficult for the law to make adaptive adjustment to the financial development,we should first respect and maintain the private governance order,then strengthen financial regulation,the regulators can intervene in the market when private governance is not working properly,and finally improve law completeness in a certain range by means of judicial interpretation and typical cases;Secondly,in the long run,we should improve the law completeness as soon as possible and improve the adaptability of law to financial development.In particular,the financial law based on the securities law is an important law to regulate the public financing,the legislature should expand the definition of securities and make exemption to improve the scope of regulation of financing behavior by law.At the same time,policy makers should ensure the allocation of regulatory power at all levels and departments through legislation,and clarify the scope of regulation and the basis of legal authorization,especially the regulation scope of local financial regulation;Thirdly,we should constantly improve the market environment,accelerate the reform of financial marketization,strengthen the credit constraints of market subjects,improve the market self-discipline ability and private governance efficiency,and provide a good market base for legal reform and financial regulation. |
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