A Research On The Regulations For The Exercise Of Trade Books In China

With recent large corporate collapses emerged, the issue of financial information and its disclosure has been greatly highlighted. Numerous surveys have shown that this has become one of the hottest topics since discussing on the financial reporting fraud, the shareholder's right to learn the truth as well as corporate governance. Most of these researches are taken under corporate law legislation or accounting law, only a few of them are concern on the trade books, which limited to the analysis of its function or an induction of such legislations of other countries. It seems that the concept of exercise of trade books is not as important as it performs in the trade practice. This paper is focused on such a special issue by inducting and analyzing the problems that might happen in the practice of exercising trade books. It is believed that with this upgrade knowledge, these problems such as classifying different legal responsibilities among the cases of financial information disclosure would be more practicable and the financial information fraud would be halted and detected better if there is any.The trade book legislation, as one of the essential legislation in commercial law area, is recognized by its content about the classification of trade book, its establishment principles, legal relations, management and effect. The rationale for the research is therefore carried out through three stages. At first, it is essential to gain a perspective concerning on trade books by an overview of the concept and features of trade book, its functions and significance. Then, for a better understanding of this serious problem for financial information disclosure and its solutions, illustrate the different legal relations on exercise of trade books. The article focused on analyzing each objective's rights and obligations respectively and the legal consequence of violating their duties. It is found that the situation in China should be improved urgently. Finally, a conclusion is made by discussing the feasibility of set up the trade book operation legislation with classified trade book makers, advanced trade book management rules, matched rights, obligations and legal responsibilities of different kind of financial information users and effective remedies.