The Investor Protect In Equity Crowdfunding

In order to promote the protection of investors in equity crowdfunding,this paper discusses how to realize the investor protect in the future,when the public offerings related to equity crowdfunding are legalized in China.In the first chapter of this paper,firstly,in view of the status of legislation in the field of equity crowdfunding in China,this paper clarifies the reasons why the equity crowdfunding is limited to “Internet non-public equity financing” or “private equity crowdfunding” by the current legal norms.As for the current legislative content or trends in China,it points out the possibility of legalizing the public offerings related to equity crowdfunding in the future.Secondly,based on the realistic conditions,this paper demonstrates the needs of being brought into practice of the inclusive financial concept,the contradiction between the financing needs of SMEs and the restrictions on private capital flows.It demonstrates the necessity in the reality to welcome the legalization of public offerings in the equity crowdfunding in China.Finally,based on the above legislative and realistic backgrounds,this paper clarifies that the precondition for the development of the real equity crowdfunding in China is the introduction of exemption rules.The core issue is then the investor protection under exemption.The second chapter firstly introduces the operation mode of the limited equity crowdfunding in the practice in China and how it would influence the investor protection under the real equity crowdfunding in the future,after that the public offerings in equity crowdfunding are allowed.Then,it is analyzed,which the problems are,that the investors are faced with,and how it will last into the future.Under the current operating mode,the problems are mainly reflected in three aspects,namely,the legal nature and the scope of the obligation of the crowdfunding platform,the information disclosure obligations of the financiers,and the threshold for the investors.In order to solve the above problems and make up for the shortcomings of domestic legislation,the third chapter of this paper deeply examines the relevant content of the German equity crowdfunding exemption rules.It introduces firstly the situation that Germany has been also faced with the lack of law and protection of small investors at the beginning of the development of equity crowdfunding.But gradually the “gray zone” of the legislation has been eliminated.In this process,the introduction of the German Small Investor Protection Act in 2015 has played an important role.It promoted the revision of a series of laws in the field of finance.The most important one related to equity crowdfunding is the revision of the German Property Investment Law.The law officially incorporates the exemption rules for equity crowdfunding by introducing an exemption clause,the core of which is “the exemption from the prospectus obligations”.At the same time,however,considering the risk of investor protection that may be further exacerbated by the exemption,legislators have thus imposed obligations on information book,advertising obligations,investment limits,review obligation on the investment limits and the information.Based on the theory of financial consumers,the restrictions on exemption largely reflect the lack of protection according to the traditional consumer protection mechanisms under the equity crowdfunding exemption.Therefore,it is necessary to give more consideration to the interests of investors through further rules.For example,the restriction on the amount of investment reflects the breakthrough of the theory of financial consumer protection,because this restriction is imposed on investors themselves instead of on the financiers.In terms of the function of the platforms,German legislators have adopted a medium obligation for them,that is,to impose obligations that are heavier than a purely neutral one,but lighter than due diligence obligations,so as to avoid overburdening the financiers.Finally,on the basis of the similarity of the two countries' issues and problems,this paper clarifies the reference of the German equity crowdfunding investor protection mechanism to China.Therefore,it focuses on the three main players of equity crowdfunding,namely,financiers,platforms and investors,together with the rational cultivation of investors,and puts forward specific suggestions for the construction of the investor protect mechanism in the future equity crowdfunding in China.