Analysis Of The Legal Risk And Suggestions For Regulation Of Protocol Control Mode

In recent years, because of the improvement of domestic financing environment and the introduction of new policies of regulation and supervision, the future of the listing mode of protocol control is facing a dramatic change. After a comprehensive survey of the birth and development of protocol control, we find that alteration on policies of regulation and supervision has a great influence on the fate of protocol control. This paper selects the Internet industry as study object, and the return of China Concept Stock as start point. And some suggestions for regulation and supervision is provided after an all-round analysis of the birth, legal structure, legal risk of protocol control.The first part of the paper is about the concept and essence, the structure and legal characteristic of protocol control. Besides, it contains a brief introduction of the content of a Package Agreement and a summarization of the reason for the birth of protocol control.The second part of the paper analyses the legal risk of protocol control from the standpoint of contract, corporate governance and regulation. The legal risk from contract is embodied in uncertainty of its legal effect; the legal risk from corporate governance manifest itself as the risk of breach of agreement, the struggling for control, and the risk of agency and equity holding; the legal risk from regulation lies in the confusion of supervision and lack of substantive regulation, which has not only caused trouble in application of law, increased the legal risk from contract and corporate governance, but also led in dilemma of regulation.The third part of the paper makes a summarization of and a comment on recent changes about regulation on protocol control mode, and then puts forward several suggestions. First, a multi-level system of capital market should be established and the registration system should be carried out to improve the listing environment. Second, the relevant legislation should be unified and the mode of protocol control should be brought into regulation unequivocally, and the standard of substantial control should be determined, to ensure the smoothing going of follow-up supervision. Third, loose and comfortable policy condition should be built and preparation mechanisms for the returning of protocol control enterprises should be set up, to attract more protocol control enterprises to come back home.