Legal Regulation Of Private Bond Financing

Private equity is an important mode of enterprises financing, especially for SMEs. Private placementbond has unparalleled advantages in fundraising convenience and issuance costs.But in our legal system,Private placement bond which is something new in China’s capital market is not complete in the specificlegal norms,and is not smooth in convergence of legal provisions. The laws and regulations are so absencethat the private financing which is an important enterprises financing channel is lack of appropriate normsand protect,the investors’ rights are not fully protected, subscription wishes are not strong, and the purposeof corporate finance can not achieve. So it is necessary to improve private financing laws and regulationsand establish legal system as quickly as possible.This paper studying private placement bond regulationcombines with"Securities Act",and is divided into four chapters:The first chapter defines and analyzes the basic theory of the private placement bond and private rangeby discriminating the difference of private and public offerings, private lending and the concept of illegalfund-raising,and analysis the private placement bond in the point of law and economics further. Thesecond chapter introduces various countries’ legislation and regulatory mode and learnes from theexperience of good system design,such as the industry self-regulation of United Kingdom. The thirdchapter analysis the problem existing in private bonds legal system. It points out that China’s private debthas no direct legal basis,regulation is not smooth in convergence,and the regulation level of the issuance ofprivate debt is low. The fourth chapter makes recommendations for perfecting the regulation of private debtlaw in our country. The paper proposes to straighten out the legal relationship conflict, modify the legalnorms to make the private debt issuance law-abiding. At the same time,we should strengthen supervision,improve the information disclosure system of private debt, improve the liquidity of the private equitymarket to protect the interests of investors and promote the healthy development of private market.