A Study On Legal Issues Of Financial Derivative Market

The appearance of derivatives was related to law. The traditional Financial Laws precipitated the derivatives. It was used to make a profit by evading law.And the motives had become possible because of the vacuity and defects of law. Law had been made to regulate it. Sometimes its developments were out of control. So this article is plowing through the related legal issues of the financial derivative market. It comprises three parts, the preface, the body and the epilogue. The introduction is about the necessity of founding the market, the deficiency of law and the methods for study .The body consists of six chapters .Chapter One is the outline of the financial derivative market. It subdivides into two segments. The first is basic conception characters and class. The second is retrospect of the history and background, analysis of its efficacy and its risk. Chapter Two is the legal issues of the establishing market.It is mainly about the legal issues of the exchanged-traded derivatives . Experiences of foreign countries is used for reference to our derivative market. It falls into four portions. The first is the issuing , the second is the coming into the market, the third is the selection of the exchanges and the fourth is the path of the development of our derivative market. Chapter Three is the legal issues of the trading. It refers to legitimate transaction body, the effectiveness of the contract and the disclosure of he information. Chapter Four is the legal issues on the keeping away the risks in the course of the trading .It based on the ISDA documents about netting and credit supporting. Analyzing the effectiveness of netting and credit support documents under laws about bankruptcy and assurance of different countries. Notices has been taken to the joining betwreen ISDA and related laws of our country. Chapter Five is about the regulation of the derivative market. Comparative methods has been used for study of the mode and system of regulation. Also putting forward suggestions of how supervising Chinese derivative market .Emphases has been set on strengthening the international cooperation of legal supervision of financial derivative market Chapter Six is the development of Chinese market and personal suggestion on the market. The keystone is the analysis of the defects of Chinese derivative market and how to perfect the legal issues involved the market. Setting up the right guiding principle of legislation and establishing the 4-level system of legal supervision. China must develop its financial derivative market in a steady an orderly way under Law of derivatives trading.