The Supervisory and regulatory dilemma on equity-based crowdfunding in Taiwan

Abstract

Equity-based crowdfunding is an important portal for raising fund in Taiwan because the traditional financing sources are unable to meet the capital needs of those who would be able to raise fund through Equity-based crowdfunding.

However, Information asymmetry has existed between investors and fundraisers in equity-based crowdfunding. Because fundraisers own and operate the business, they have all information, but investors do not. The GISA regulation can eliminate information asymmetry by imposing disclosure duties on fundraisers.

This thesis tries to highlight the necessity for The GISA regulation to reduce information asymmetry. By comparing the GISA with laws and regulations of the USA and Singapore, this thesis found that the GISA regulation should impose the Suitability Obligation on crowdfunding platforms in Taiwan. Furthermore, the GISA regulation shall be incorporated into the Securities and Exchange Act or enacted by the parliament to enhance the investors’ protection for equity-based crowdfunding.