Study On Construction Of China’s Legal Institution Of Equity Crowdfunding

The global crowdfunding market has grown substantially over the past few years and a large worldwide potential for crowdinvesting is expected to materialise in the next decade. Equity crowdfunding, as a complementary or alternative financing method in the early stage financing market, through the internet portals, succeeds in attracting seed funds from investors to support the development and growth of the potential start-ups. The traditional angel investors are starting to put their networks onto the internet to reorganize the investment model and procedure, while the venture capital investors are taking more activities in this market. Even some institutions and individuals lack of investment experience are emerging in this field, becoming the potential investors.In the legal system of China, the articles of regulation on equity crowdfunding scatter in many laws, ranging from company law, partnership enterprise law, security law to criminal law. China has not adopted an ad hoc regulation on equity crowdfunding. The equity crowdfunding is done on the Internet and faces the masses. These characteristics make many conflicts with the current legal system, particularly in the field of public offerings. So it is urgent to find solutions to these problems, such as how to operate the equity crowdfungding legally under the current legal system and what changes should made to the regulation mechanism with an legal hysteresis quality to create an good environment for the equity crowdfunding.This thesis, firstly, does a deep analysis on the concept, characteristics, procedures, participants and legal nexus of the equity crowdfunding, listing out different risks faced by different participants. Secondly, an introduction to the current legal environment and legal risks is done, pointing out the legal restrictions to the equity crowdfunding. The current legal environment is not propitious to the development of this newly emerging matter, particularly, public equity crowdfunding is illegal in China currently. This thesis is trying to solve the above-mentioned problems from two aspects. On the one hand, from a perspective of the economics of the law, do some analysis on the problem and conclude the principles that the regulation on the equity crowdfunding should abide by. On the other hand, the ways of regulation of the USA and Italy offer an precious lesson for China, some analysis on JOBS act and CONSOB regulation is done in this part. Subsequently, the self-discipline rules (for trial implementation) of private equity crowdfunding is analyzed. At the end of the thesis, the conclusion is drawn. Within the framework of current financial regulation, some improvements should be made to the regulation system on the private equity crowdfunding, especially in the field of investor protections and information disclosure. For the development and growth of public equity crowdfunding, some modification should be done to the pre-rules, and the integration law of financial services or instruments may be an proper solution to the financial innovation, it may be a good way of keeping the balance between the innovation and proper regulation on the risks.