On The Legal System Of Investors’ Rights Protection In Equity Crowdfund

Promoting the formation of capital and protecting the rights and interests of investors are the two major legislative purposes of equity crowdfunding.Capital is the driving force for enterprise development,while protecting investors is the eternal proposition of the capital market.How to maximize capital formation on the basis of promoting capital formation Protecting the legitimate rights and interests of investors is a problem that every country must face when legislating equity crowdfunding,and it is also a purpose that must be implemented in equity crowdfunding activities.In addition to the introduction and conclusion,this article is divided into four parts:The first part is the basic theoretical research on the protection of investors’ rights and interests in equity crowdfunding.First of all,whether equity crowdfunding is a public offering or a private offering is a more controversial issue in equity crowdfunding research.According to the existing securities public-private equity classification standards,it can be determined that equity crowdfunding is a public offering.According to the theory of corporate financial growth,companies in different growth stages correspond to different capital market levels,mature companies correspond to the first and second board markets,and growth stage companies correspond to the third and fourth board markets,but there is no corresponding capital market sector for start-up companies.The emergence of equity crowdfunding can fill this gap.Therefore,it is necessary to divide the equity crowdfunding market into the new five boards of my country’s capital market.Secondly,analyze the legal relationship between equity crowdfunding entities: investors are shareholders of financing companies,crowdfunding platforms and investment and financing parties have an intermediary relationship,and crowdfunding platforms are information intermediaries.Finally,clarify the rights of investors,clarify the legal obligations of financiers and crowdfunding platforms,and provide a theoretical basis for the protection of equity crowdfunding investors.The second part is about the problems existing in the protection of the rights and interests of investors in equity crowdfunding in my country.First of all,most of the investors in equity crowdfunding in my country are non-professional investors,facing the problems of fraud risk and moral hazard,and lack of investor investment access control rules in law.Secondly,due to the imperfect rules of market information disclosure,financiers may use information differences to deceive investors and harm their interests.Furthermore,as a bridge connecting investors and financiers,the equity crowdfunding platform should maintain a neutral position,but the crowdfunding platform is a commercial organization after all.In order to maximize profits,there may be improper fraud,manipulation of investment funds,etc.behavior.Finally,investors participate in equity crowdfunding activities to obtain income,and exiting crowdfunding projects is the main way to obtain income.However,in practice,financing companies generally do not cooperate with investors to withdraw from crowdfunding projects due to the supply of capital chains,and the lack of an open transfer market in China has created a difficult situation for investors to withdraw.When investors are faced with a situation where their interests are damaged,traditional litigation channels are time-consuming and difficult to provide evidence and cross-examination,which makes it difficult to effectively protect the rights and interests of investors.It is based on the above four issues that the investor protection system is not fully implemented in the equity crowdfunding market.The third part is the extraterritorial reference of the legal system for protecting the rights and interests of investors in equity crowdfunding.Draw lessons from the legal systems of equity crowdfunding investor rights protection in the United Kingdom,the United States,and Italy,and summarize the lessons that can be learned from the legislation of these three countries: First,use investor classification regulation and investment limit regulation to classify investment risks.Control the risk within the acceptable range of investors.Second,use information disclosure rules to force financing companies to disclose the core information of crowdfunding projects to protect investors’ right to know.Third,strengthen the supervision of equity crowdfunding platforms,clarify the responsibilities and prohibited behaviors of the platform,hire third-party institutions to manage funds,and prevent the platform from creating moral hazards for seeking improper benefits.Fourth,establish a public transfer market for equity crowdfunding,increase the liquidity of equity,and allow the resale of equity crowdfunding securities to specific investors.The fourth part is the suggestion to improve the legal system for protecting the rights and interests of investors in equity crowdfunding in my country.From the perspectives of the three market entities of investors,financiers,and crowdfunding platforms,improve the rights protection system for investors in equity crowdfunding.First of all,due to the different circumstances of investors in terms of economic income,risk identification and tolerance,investors are classified and managed,investment limits are set separately,and investor access is regulated.Secondly,equity crowdfunding projects have relatively high risks,and it is necessary to establish risk classification management rules for equity crowdfunding projects and improve information disclosure rules to protect investors’ right to know.Furthermore,as an information intermediary and gatekeeper for equity crowdfunding activities,crowdfunding platforms can achieve the purpose of strengthening supervision and tilt investors through measures such as standardizing responsibilities,managing funds by third-party institutions,orderly exiting the platform,and self-regulatory management of the industry, to protect and safeguard the legitimate rights and interests of investors.Finally,a third-party organization should reasonably determine the value of equity,build a public equity transfer market for crowdfunding,increase equity liquidity,introduce online arbitration to achieve rapid and convenient resolution of disputes,and determine a cooling-off period to protect the interests of investors when they are defrauded.