Download this Paper Open PDF in Browser

Managing the Risks of Equity Crowdfunding: Lessons from China

Journal of Corporate Law Studies, 2017, (Forthcoming)

39 Pages Posted: 31 Jan 2017  

Lin Lin

National University of Singapore (NUS) - Faculty of Law

Date Written: January 30, 2017

Abstract

The Chinese experience shows that equity crowdfunding platforms fail to perform their role as neutral intermediaries in the distribution of information relating to the fundraisers in the absence of regulation. This article contends that, in the context of the Chinese market, private ordering alone will not address the extreme agency and information asymmetry problems inherent in equity crowdfunding platforms. The contractual designs adopted by numerous Chinese platforms, especially that of the syndicate contract, not only fail to address the conflicting interests but also introduce additional conflicts. Other market mechanisms such as reputation, exit and private insurance, are also insufficient to ensure investor protection. Therefore, this article proposes specific regulatory measures to enhance investor protection.

Keywords: equity crowdfunding, platforms, investor protection, China

Suggested Citation

Lin, Lin, Managing the Risks of Equity Crowdfunding: Lessons from China (January 30, 2017). Journal of Corporate Law Studies, 2017, (Forthcoming). Available at SSRN: https://ssrn.com/abstract=2908123

Lin Lin (Contact Author)

National University of Singapore (NUS) - Faculty of Law ( email )

469G Bukit Timah Road
Eu Tong Sen Building
Singapore, 259776
Singapore

Paper statistics

Downloads
246
Rank
105,622
Abstract Views
625