Research On Legal Issues Of Equity Crowdfunding

The first crowdfunding portal showed up in China in 2011,as time flies,the number has increased greatly,and crowdfunding has become a very important way of financing for small and micro enterprises.In the year of 2015,State Council and China Securities Regulatory Commission issued lots of guidance about equity crowdfunding.In response,local governments actively promote the trial of crowdfunding portals.However,equity crowdfunding still has many problems to be solved under the current legal system.First,due to lacking of legitimacy and the conflicts between equity crowdfunding and Securities Law,crowdfunding is not officially admitted by any law,therefor,there’s no legal fundamental to supervise crowdfunding.Second,equity crowdfunding is defined as small,open and crowd,which determines that the risks of crowdfunding are various,relevant institutions should be established to protect the investors and maintain the stability of the capital market.In 2015,the draft of Securities Law has mentioned crowdfunding,on that background,the establishment of the legal system of equity crowdfunding is very important to the construction of multi-level capital market.Based on the revise of Securities Law,this article analyzes the obstacles of equity crowdfunding under the current legal system,and offers some suggestions one the angle of the three main participants of equity crowfunding,which are the investors,the issuers and the equity crowdfunding portal.Apparently,there are many obstacles of equity crowdfunding.This article combs the current laws,regulations and regulatory documents referring to equity crowdfunding,and points out that the court has admitted the legality of equity crowdfunding in the case of Nuomiduo VS.Renrentou.Then this article raises the two main obstacles of equity crowdfuning,which are the conflicts with Securities Law and the lack of legitimacy.In order to clarify the legality of equity crowdfunding and solve the conflicts between equity crowdfuning and Securities Law,the definition of security should be expanded and the institution of crowdfunding exemption should be established.Then the article describes the institution of protecting investors.Referring to foreign legislation experience,this article suggests that we should establish an institution of protecting investors from the perspective of investors,and also,from the perspective of issuers,set up the limit of the amount of financing,and establish the information disclosure system.At last,this article takes the angle of equity crowdfunding portal and gives the suggestion that the regulatory system of the equity crowdfunding portal should be established,after analyzing the nature and obligations of equity crowdfunding portal.Also,setting up entrance standard of equity crowdfunding portal and cooperating with other capital markets is suggested.