Study On Derivatives Clearing System

Focusing specially on challenges from rapid development of financial derivatives markets in China on clearing system and risk management, this dissertation firstly reviews some important economic theories relating to establishment of derivatives clearing system, secondly investigates several mature markets'derivatives clearing systems, and thirdly puts forward suggestions of building China's derivatives clearing system, in terms of law and regulatory framework, clearing agency and risk management. This dissertation is made up by seven chapters:The first chapter is introduction, which describes this dissertation's study objectives and practical significance, and then reviews some economic theories in the domestic and the overseas.The second chapter describes the financial derivatives markets and the clearing system, especially the overseas and China's developments in financial derivatives markets. In addition, this chapter also introduces development of domestic underlying securities clearing system, which is the basis of derivatives clearing system.The third chapter establishes the basic theories of derivatives clearing system. It reviews some economic theories, including theories of government regulation over economy, Law and Economics, New Institutional Economics, risk management and X- efficiency. These theories give guidance to law makers, government regulators and management of derivatives clearing agency, so as to establish China-oriented derivatives clearing system.The fourth chapter investigates experiences of US, UK, Germany and Korea, whose derivatives markets are mature and derivatives clearing system are effective. The investigation finds that the laws, regulations and rules which are related to derivatives clearing system in these economies are relatively complete, and regulatory frameworks are much more reasonable. The investigation also finds that collective clearing business is much popular than individual clearing business in derivatives clearing agencies of above economies, and measures of risk management is much more and valid.The last part includes three parts: the fifth chapter, the sixth chapter and the seventh chapter. Based on the theories and investigations, it establishes the derivatives clearing system from from the law, the membership system and the related theories on risk management.The fifth chapter describes domestic law framework and regulatory arrangement in respect of derivatives clearing system, in particular points out their disadvantages. Then the author puts forward some suggestions, for example, formulating China's Futures Law as soon as possible, requesting derivatives clearing agency establish various measures of risk management, insisting on concentrative and uniform governmental regulation, encouraging self-regulation organizations to play important roles.The sixth chapter at first summarizes China's derivatives exchanges, which also carry on clearing and settlement function, and advantages and disadvantages of their present membership system. And then in this chapter the author suggests that collective clearing business and clearing membership system be put in practice in China.The seventh chapter analyzes the present measures of risk management made by China's four derivatives exchanges and its lacks, and proposes that put into effect of clearing membership system, margin system and settlement guaranty system, and suggests that establish uniform settlement platform of cash and derivatives to control cross-markets risks.As a whole, this dissertation includes at least three innovations. First, it initially establishes framework of domestic financial derivatives clearing system and put forward practical suggestions. Second, based on directions from some theories it avoids habits of ignoring theoretical guidance in such industries that operational work is predominant. Third, it consults but never simply follows overseas experiences.This dissertation, however, also has lacks. For instance, owing to difficulties in data acquiring, it does not anatomize clearing and settlement flow and risk management of a concrete derivatives, such as stock index future. Apart from that, the dissertation also lacks some data analysis.