The Realization Of Moderate Investor Protection In Private Placement

The rise of SMEs provided a steady stream of power for the rapiddevelopment of China’s economy, but due to the influence of the economicsystem, the focus of China’s capital market is public offering, and toprovide services for many large and medium-sized enterprise. As theproblem of SMEs’ financing becoming much more urgent, private placementof securities was gradually coming into view, and gained a leapingdevelopment in recent years. But this development remains in Stay in thefactual level with imperfect supporting laws and regulations, regulatoryauthorities lack a uniform and high level of legislative guidance. Theinvestors of securities of private placement is specific, in comparisonof the general public, they have the advantages of both wealth andknowledge and a stronger ability to protect themselves, so the regulatoryauthorities should give more consideration to the balance between theirinterests and system efficiency, financing needs. Because of theregulatory philosophy of China’s regulatory authorities remained inintervention and control in a long period of time, a moderate investor protection concept have not be fully reflected in the regulatory process.In May2012, the Shanghai Stock Exchange and Shenzhen Stock Exchangelaunched a pilot project named SME private debt which provided a wholenew channel of direct financing debt for SMEs. Unfortunately, the moderateinvestor protection concept still does not appropriately express in itsdistribution system. Therefore, I try to, in the perspective of SMEprivate debt, demonstrated the need for moderate investor protection, andachieve a concrete realization of the concept of moderate investorprotection in the issuance of securities of private placement through theanalysis of the distribution system of the United States PrivateSecurities.In this thesis, the method of historical analysis, specificationanalysis, comparative analysis and other methods were adopted, to analyzethe realization of moderate investor protection in the issuance ofsecurities of private placement. The thesis consists of five chapters;the specific content of each chapter is as follows:Chapter one gives a brief introduction of the development of China’sdirect financing debt for SMEs, and analyzes the concept of investorprotection behind them as this article’s primer, to expand the researchof moderate investor protection.Chapter two starts with defining the concept of the issuance of SMEprivate debt, discriminating public and non-public offering of securities,providing a simple list of the constituent elements of the issuance ofSME private debt.Chapter three is the focus of this thesis, this chapter starting fromthe analysis of the conflict in the value of the investor protection andsystem efficiency, financing needs in the private issuance, concludesthat the establishment of a system is a result of the balance of interestsof many parties. Then explores the need for moderate investor protection, both in the theoretical and practical basis, which providing the basisfor the discussion of realization of moderate investor protection in theissuance of securities of private placement.After analysis of the need for moderate investor protection, Chapterfour tries to provide reference for the improvement of our system throughthe analysis of the offering system of the United States privatesecurities.Chapter five demonstrates the concrete realization of moderateinvestor protection in private placement. The three parts of this chaptertake issuance examination, qualified individual investors and the firsttime information disclosure as theme, describing the current situationand defect of our system, trying to improve the system with concept ofmoderate investor protection, to demonstrate the concrete realization ofmoderate investor protection in private placement.