Recently，Sponsored by the Rule of Law Working Committee of the Internet Society of China，Internet Legal Research Center of China Academy of Information and Communications Technology、The second Internet Rule of Law Forum hosted by JD Group Legal Research Center was held at the China Academy of Information and Communications Technology。188bet online sports betting forum launched an in-depth discussion on the theme of "Four Public Supervision and Legal Issues"。Professor of Peking University Law School、Mr. Peng Bing, deputy director of the Financial Law Research Center of Peking University, gave a speech on the theme of "Legal and Business Logic of Equity Crowdfunding"。

The following is the transcript 188bet online sports betting speech:

Good afternoon 188bet online sports betting.

Today I will mainly talk about the legal and business logic of equity 188bet online sports betting.

Equity crowdfunding has been very popular in recent years，There are also many discussions，Conceptually speaking，Equity crowdfunding refers to raising small amounts of funds from the public through the Internet，Using the Internet is its core feature。But from a legal perspective，Does using the Internet have any special legal significance，188bet online sports betting depends on whether the Internet will lead to major legal breakthroughs。This will be discussed later。

Let’s talk about the nature of the transaction first，Crowdfunding is raising funds from the public，Whether you are using the Internet or radio and television，In terms of legal nature，188bet online sports betting is to raise funds from the public。In any country，Financing from the public is strictly regulated by law，Whether in the United States、Japan、Germany，All the same。Someone said，Enterprise financing is its natural right - financing is indeed its natural right，If you only finance from your parents，Of course no one cares，But when you raise money from the public，This behavior needs to be strictly regulated。Just like driving is your natural right，You can drive 188bet online sports betting at home and no one will care about 188bet online sports betting，But you have to drive onto the road，You need to take a driving license test，In fact, 188bet online sports betting requires government permission。You must obtain a driver’s license before you are allowed to drive on the road，Same as being too drunk to drive，All are based on the protection of public interests，The law imposes restrictions on certain behaviors。

1. Traditional theories of 188bet online sports betting supervision

1. Traditional 188bet online sports betting supervision methods

Discussing equity crowdfunding，The traditional securities regulatory system must be introduced first。The main goal of securities regulation is to provide direct financing to the public。Traditional securities laws have four systems for public financing。The first and most core item is mandatory information disclosure，The basic reason is information asymmetry，188bet online sports betting is the information asymmetry between financiers and investors providing funds。Under information asymmetry，In fact, the natural occurrence of financing is very difficult。Financing from strangers，188bet online sports betting is difficult to establish a trust relationship because of information asymmetry，This transaction is difficult to happen，Even if 188bet online sports betting can be established by accident，Also easy to crash。Historically，Really spontaneously formed and effective、A country with a capital market that can provide large-scale financing to strangers，USA only、UK，Germany、France and other countries have not developed yet。Like the collapse of Wenzhou private financing market in China in 2010，188bet online sports betting’s because financing transactions have expanded from acquaintance financing to stranger financing，The foundation of trust is very weak，188bet online sports betting will collapse as soon as there is any disturbance。The United States also faced the same problem in 1929，The United States promulgated the Securities Act in 1933，Established a modern securities regulatory system。The core concept of modern securities supervision is: since information is asymmetric，Then force issuers to disclose information to investors，For information symmetry。Is this idea successful?，There is a lot of controversy，I won’t discuss 188bet online sports betting here。

We must implement a mandatory information disclosure system，A second system is needed，This is the administrative licensing procedure for issuance。There are many practices in this country，for example，China needs to be approved by the Securities Regulatory Commission，In the United States, SEC registration is required。The main purpose of this administrative licensing procedure，188bet online sports betting is to achieve unification and standardization of information disclosure，and extending the issuance process through this program，So that the disclosed information can be disseminated in the market during this process，Digested by the market。

During the information transmission process，Need many market intermediaries，For example, investment bank、Investment Consultant、Lawyer、Accountant, etc.，In this way, intermediaries must digest and absorb information and feed 188bet online sports betting back to the market，Make 188bet online sports betting understandable to the public。The third system is to adopt a franchise system for these institutions，Require these organizations to obtain licenses，188bet online sports betting needs to be regulated。

The fourth system is anti-fraud，For some special securities fraud，Example insider trading，Market manipulation，The legislation has special provisions for 188bet online sports betting，Specialized supervision，The purpose is to ensure the authenticity of information disclosure，Ensure equal access to information，And ensure that 188bet online sports betting can truly reflect market information。

2. 188bet online sports betting exemption

The above is the traditional securities regulatory system。This system claims to reduce information asymmetry，is used to protect public investors，Whether 188bet online sports betting succeeds or not will be decided。But after this system is put into operation，Most companies find that if they use this method to raise funds，The cost is very high，The result will be to hinder many reasonable financing needs of enterprises。So traditional securities laws have developed some exemption systems，That is, under special circumstances，If the problem of information asymmetry is not so serious，Or there are other ways to solve 188bet online sports betting，We will exempt you，You don’t need to follow the same procedure，Give you some simplified procedures，Lower cost program。Traditional securities exemptions mainly include private placement exemptions、Small exemption and regional exemption。The more important ones are small amount exemption and private placement exemption。

Small amount exemption。If the financing amount is not high，The cost of the procedure you asked me to go is too high，Because of registration or approval requirements，Information disclosure has fixed costs，For example, you must hire a lawyer, auditor, etc.。So，Based on cost-benefit considerations，For some financing with a small amount，The registration requirement should be exempted，This is the small exemption。But after the introduction of small exemption，Everyone found something wrong，Fraud is still possible even with small amounts，And because there is no supervision，Fraud is still serious，Investors suffered heavy losses。So small exemptions also have various regulatory restrictions。Take the United States as an example，Small exemption has never been done。U.S. Regulation A is the famous small exemption rule，There is a limit on the amount，188bet online sports betting turned out to be less than 5 million US dollars，Issuance method、Issue object、No restrictions on resale，But there are still simplified information disclosure requirements。And the states are still not worried，So even though the small-amount issuance is exempt from federal securities regulations，Must also comply with state securities regulatory requirements。The result is that the cost of small exemptions in the United States is high，Almost no one uses 188bet online sports betting。

Private placement exemption。The private placement exemption is the most widely applicable exemption。There are generally several standards for private placement exemption supervision，The most typical standard，This is what everyone thought of from the beginning，Number of people standard - since 188bet online sports betting is a private placement，Obviously not too many investors，For example, China still adheres to the 200-person standard。The number standard is also the earliest standard adopted by the SEC，Later struck down by the U.S. Supreme Court in 1953。The U.S. Supreme Court decided a case in 1953，Said we don’t think the number of people is important，Not a standard for defining public issuance and non-public issuance。So the standard that was actually used to define private equity in American practice，The first one is the distribution method，Cannot be released to the public;The second is the issuing object，Requirements for issuance objects，In China we are used to calling specific objects，American custom says qualified investors。

2. Legal logic of equity 188bet online sports betting

Finished discussing the traditional securities regulatory system，We will come back to discuss equity 188bet online sports betting。

The nature of equity crowdfunding is to raise funds from the public，This brings 188bet online sports betting into the traditional securities regulatory system。But this traditional issuance supervision system is very costly，Equity crowdfunding is obviously not going to work，An exemption must therefore be sought。But the question is what breakthroughs the Internet has brought that can exempt 188bet online sports betting?That is, what are the special features of equity crowdfunding that can solve the information asymmetry problem just mentioned，Thus no need for supervision。There is no dispute that the Internet has reduced the cost of information exchange，The core of the problem is whether the Internet can solve the problem of information asymmetry。

We are now proposing several theories，A thing called the wisdom of crowds，the wisdom of crowds，This is the view put forward by a New York Times best-selling book in 2004，As long as there are enough people participating，The collective wisdom of this crowd exceeds the wisdom of a single individual。But that book mentioned that four conditions must be met to form group wisdom，Scattered、Independent、Decentralization and convergence，But among these four conditions, two core conditions (independence and convergence) do not exist in equity crowdfunding，Especially the last one: How to bring scattered ideas together，188bet online sports betting’s very difficult in equity crowdfunding。The typical aggregation method is the price mechanism，But because there is no public trading market for equity crowdfunding，There is no way for scattered ideas to be expressed and aggregated through their respective prices。

Another way to solve information asymmetry is the use of social media。Adoption of social media is believed to help detect fraud。For example, human flesh searches often occur on Weibo。But does 188bet online sports betting really solve the problem?There are also many frauds happening on Weibo。

Everyone has high hopes for big data，Everyone thinks that big data can be used to analyze fundraisers，188bet online sports betting can help investors identify risks of fundraisers。There are indeed some cases that illustrate the role of big data，For example, Alibaba Small Loan is a typical big data application。But look carefully，Alibaba small loans are limited，The information 188bet online sports betting can collect is all online stores on Taobao，And the loans are all run in a closed system，So Ali can control loan risks。Alibaba Small Loan is currently very successful in big data operations，But if 188bet online sports betting exceeds the existing range，188bet online sports betting’s hard to say。We can look at another example，I often use this example to laugh at Baidu。Everyone can imagine，Theoretically，Baidu should have great advantages in doing big data，188bet online sports betting is the most widely used search engine in China，There should be a lot of data。In 2014, Baidu once launched a trust product—Baidu Baifa。In this product，Baidu claims to have used big data to predict the box office of a movie - "The Golden Age"。You can take a look at the predicted results，The gap is very big，The predicted box office is 2-2.500 million，Actually only 50 million。Not that big data cannot be successful，I just use this case to say that big data is hardly a mature technology so far。

The methods mentioned above to solve the problem of information asymmetry are all immature，But for various reasons，In 2012, the United States passed the Jumpstart Our Business Startups Act，JOBS Act) Creates Equity Crowdfunding Exemption，This is the crowdfunding method in Chapter 3 of the JOBS Law。But if you look at the law carefully，We will find that 188bet online sports betting actually does not rely on the big data mentioned above、Social media stuff，188bet online sports betting still adheres to the traditional securities supervision model，Just some changes。First，The crowdfunding law requires information disclosure for issuers，Secondly，Requires crowdfunding to be conducted through a securities firm or fundraising platform，Registration is required for these crowdfunding websites，Accept supervision similar to that of a securities firm，This is actually a requirement for the supervision of securities intermediaries。Last，There is also a stricter anti-fraud system。Also，There is also an issuance limit，Under US million。This still adheres to the traditional securities supervision methods，188bet online sports betting’s just that you don’t need to go through the registration process。

The only innovative regulatory method here is the investment limit - if the annual income is less than 100,000 US dollars, the annual investment in 188bet online sports betting shall not exceed 2,000 US dollars or 5% of the net assets。

Investment limit is the legal logic of equity crowdfunding that we will focus on today，However，This logic does not come from the Internet。The investment limit system is the result of the development of the traditional private equity regulatory system。I just talked about traditional private equity supervision，What does 188bet online sports betting regulate?Regulatory issuance method - cannot be publicized;Then you need to supervise the investment objects，188bet online sports betting is a specific object。What is a specific object?The U.S. Supreme Court held that，Actually the condition is very simple，Just one standard - these investors can protect themselves。Why does the law regulate public offerings，Why investors are forced to disclose information?188bet online sports betting’s not because of information asymmetry。If the investor has the ability to obtain information，Or you may be able to protect yourself without obtaining information，These regulatory requirements can be exempted。If investors can protect themselves，There is no need for the protection of securities laws。

After this standard was set in 1953，People find this standard very troublesome to use。Traditionally, 188bet online sports betting is believed that there are two types of investors who can protect themselves。One is a special relationship，188bet online sports betting is a special relationship with the issuer，For example, the investor is a senior executive of the issuer，Or the chairman’s mother-in-law。Although this mother-in-law is illiterate、Can’t understand any data，But she is good enough to protect herself，Because of her special relationship with the chairman。The other type is investors with mature experience，He has the ability to identify risks，For example, Li Ka-shing、People like Buffett，People have the ability to protect themselves。Both types of investors are people who can theoretically protect themselves，But the problem is that both types of definition standards are difficult to implement。What kind of special relationship is enough to protect yourself?Obviously not all mothers-in-law of chairman are able to protect themselves，This needs to be discussed in a specific context。What kind of investment experience constitutes a mature investor?Obviously Li Ka-shing cannot be used、Buffett’s standards are required of everyone。This makes these standards not objectively defined，Can only be discussed in individual cases，So 188bet online sports betting cannot be used in practice，The issuer found that the uncertainty was too great，Just like our current standards for illegal fundraising。

Private equity did not develop significantly in the United States until 1982，188bet online sports betting is because the SEC promulgated Regulation D in 1982。A new concept is determined in Regulation D - permitted investors: natural persons with an annual income of more than US0,000 are permitted investors，These people are specific people，Issuing to these people is private placement。188bet online sports betting uses wealth to draw a clear standard。Wealth standards are very simple and objective，As long as you show your income certificate, you will know how much your income is，In this way, the crowd can be objectively defined in advance。So private equity began to develop on a large scale in 1982，so far，Based on 2012 data，The annual private equity financing scale in the United States is about one trillion US dollars，The amount raised through IPO issuance of shares is only over 200 billion，In other words, the scale of private placement far exceeds the public offering of shares。

However，The wealth standard brings about big problems in theory: being rich does not mean that he has mature investment experience。Why you have the ability to identify risks if you have money，If you have money, you can overcome information asymmetry?In practice，The United States has discussed several times to abolish wealth standards but has failed，At most, change how to adjust wealth standards according to inflation，How to increase the requirements for net assets, etc.。There are many theoretical explanations for the adoption of wealth standards，A more accepted explanation is: why wealth standards are used to define private equity?188bet online sports betting’s not because rich people have the ability to identify risks，But because he has risk tolerance，Although he cannot tell whether the project is fraudulent，But the investment failed，He will not come to you and jump off the building，Unlike Chinese aunts who go to the Securities Regulatory Commission as soon as their investment fails，Rich people are not like this，He is rich，He can afford to lose。

Let’s continue the discussion under 188bet online sports betting theory (vote for dark horse www.tou.vc is a crowdfunding platform focusing on the cultural and creative fields) you will find，If risk tolerance is used to define investment objects or so-called specific objects，You will soon discover that traditional private equity supervision is wrong。Traditional private equity regulation restricts public solicitation，But if all investment objects are risk-tolerant，The ban on public solicitation is unnecessary。Although the public will see the fundraising advertisement，But he has no ability to invest，Will not be defrauded。So there is no need to publicly persuade and ban。

Also，Since we are talking about risk tolerance，188bet online sports betting must be a relative concept。Net worth 1 million，If you invest 100,000 and lose, 188bet online sports betting will have no impact on you;What if the net worth is only 100,000，But if you only invest 10,000，The loss will not have a big impact。So，Risk tolerance must be a relative concept，Not limited to the rich，Completely extendable to everyone。On this basis，Investment limits have just been extended to equity crowdfunding。The core of the current public equity crowdfunding concept lies here - although 188bet online sports betting is exempted from raising funds from the public，But there are investment limits。The premise of expanding to the public is that each public’s investment amount is limited。

However，The goal of the US JOBS Act is to solve the financing problems of small and medium-sized enterprises，Create jobs，Therefore，188bet online sports betting is not limited to public fundraising。Under the logic just mentioned，Title II of the US JOBS Act also stipulates private equity crowdfunding-that is, as long as all funds are raised from approved investors，You can publicize 188bet online sports betting publicly，Public solicitation prohibition does not apply。This is a private equity crowdfunding exemption regime。

In addition，Title 4 of the JOBS Act expands the original small exemption，A large-amount public crowdfunding exemption has also been developed。Traditional small exemptions are rarely used in the United States，Because there are two restrictions: information disclosure;Regulated by each state。Chapter 4 of the JOBS Act increases the amount of small issuances from the original US million to US million，The financing amount becomes larger。Although the cost of information disclosure is still there，But relatively speaking，The cost is reduced。But for state regulation，188bet online sports betting exemption is not enough。Chapter 4 currently allows the issuance quota to be expanded to 50 million，But how to exempt state regulation?There are two requirements for investors: one is for permitted qualified investors;The other is to use the concept of investment quota，The investment amount of non-accredited investors cannot exceed 10% of net assets。Meet these two conditions，You are allowed to issue to the public within a quota of 50 million，Not only exempt from federal regulation but also exempt from state regulation。Small exemption is not prohibited by publicity，So the internet is available，188bet online sports betting will be a new exemption system for equity crowdfunding。Equity crowdfunding mainly solves the financing problems of small and medium-sized enterprises，USD 50 million is enough。

3. Business logic of equity 188bet online sports betting

So，We can see three types of equity crowdfunding。Under the traditional securities supervision concept or logic，We can divide 188bet online sports betting into three types，One is "public fundraising"，188bet online sports betting has a quota limit，US million in U.S. law，There are information disclosure requirements and other regulatory requirements。Another category is called “private crowdfunding”，188bet online sports betting has no quota limit，No information disclosure requirement，Only restrictions on issuing objects，Must be a qualified investor。I call the third category “large-amount public fundraising”，Is an extension of the traditional small exemption: issuance amount limit，But very big，has been expanded to 50 million，The number of investors is large，No qualification restrictions，But there are investment quota requirements，Then there are some disclosure requirements，There will be more requirements than public crowdfunding，The cost is higher。

What will be the market structure of these three types of equity crowdfunding in the future，188bet online sports betting’s hard to tell now，Because in fact, the first type of public fundraising has not yet taken effect in U.S. law，But private placement and large public offering crowdfunding，SEC has promulgated specific rules，All have taken effect。From a business logic perspective，I think，Issuers will prefer private placement crowdfunding，Because the cost is relatively low。Although there are investment qualification requirements，But in fact, everyone knows that the distribution of wealth in any society is uneven，The rich control a large amount of wealth in society，So even if 188bet online sports betting is only financing for these rich people，In fact, 188bet online sports betting can completely meet the financing needs of enterprises。So I think the prospects of private equity crowdfunding are better。

Public crowdfunding may only be suitable for some special industries，188bet online sports betting’s like the movie crowdfunding I just talked about。Some consumer items like movies、Service businesses may be more suitable for public fundraising，Can lock its consumers beforehand，The so-called fan economy。Other high-tech companies are unlikely to be willing to take this path，Because the cost is too high。

188bet online sports betting is my speech today，Thank you everyone。(Peking University Financial Law Research Center)