Legal Matter Research Of Strenthening Financial Derivative Transaction Regulation On The Subprime Mortgage Crisis

Influenced by comprehensive factors, nowadays the various countries'money markets and even the global money market outbreak significant events frequently like the unpredictable weather. The financial organizations, enterprises, individuals and someother who were involved in money markets, faced great risk like price changing and so on, all the time. But actually these risks were hardly avoided by the application of the traditional financial tools. Furthermore, the traditional financial tools were more and more unable to fulfill the day by day growing demands like hedging for value protection purposes, arbitraging, speculating or investment from participants in various money markets. And then, being a product of the financial innovation and brand-new financial risk management method, the financial derivatives, which took the forwards, futures, options, and swaps as its main body, arose at the historic moment. For the reason of its unique functions like risk shifting, price discovering and so on, the financial derivative market also rapidly developed into one of the three biggest money markets, kept pace with the currency market and the capital market, and had made great contribution to the world economic development. Looks over the world on each international finance center, no one is not a highly developed financial derivative transaction place.However,the existing financial derivative market regulation system is built up by the Deregulation Theory , wihich took Free Market Fhilosophy as its basis."The subprime mortgage crisis challenged the primary theoretical hypothesis that the former regulaition methods relying on, especially the theory about Rational Market and Market Self-regulation Function"(Chairman of FSA, Lord Turner, 2009). The outbreak of the subprime mortgage crisis indicated that the financial derivative market regulation is needed to be strengthened. And the general direction of strengthening the financial derivative transaction regulation rests with its defects exposed in the international financial evens, the risk points formed by the special propeties of the financial derivatives, and the existing consensus of the international community. Therfore, summing up the experiences and lessons from the coping actions to the the international financial evens like the subprime mortgage crisis (and the related Mini-bond Disturbance in Hong Kong), Reviewing the defects exposed in the international financial evens of various countries (and regions), reseraching a series of legal matters related to strengthening the financial derivative tansaction regulation, has great value in theory and practical significance.First, Starting from analyzing the cause of formation and the transmission mechanism of the subprime mortgage crisis, and its relationship with the legal matters of American and international financial derivatives regulation through dimensions of macro-viewed economic situation and middle-viewed financial event, the paper studied the cause of formation of the Mini-bond Disturbance in Hong Kong and the experiences and lessons from the coping actions through dimensions of micro-viewed case, discussed the fundamental characters, the definition, the legal property, and the category of the financial derivatives transaction.Second, base on analyzing the present situation of coexistence of Single Unit System and Multi Unit System of the financial regulation subject, the paper discussed the market access for financial derivatives regulation in two aspects, the establishment of financial derivatives market, and the market access of financial derivatives; Base on analyzing the category of financial derivatives, the paper discussed the drawbacks of too narrow scope of regulation, and further discussed issues of the qualification regulation of subject involved in financial derivatives transactions and the investor protection; From three aspects, the regulatory regime, regulatory concepts and regulatory methods, the paper discussed the existing problems on the forms of regulation, highlighted the risk regulation of financial derivative transactions, and discussed the existing problems on the financial regulation rules in two aspects of domestic law and international law.Last, the paper made a comprehensive prospect on the direction of strengthening the financial derivative transaction regulation: Reform regulation subject to Single Unit System, regulatory powers centralization; Diversity regulation object, magnify the scope of regulation; Systematic regulation pattem, composite regulatory methods; Regulation rules internationalization, regulation system completion, as the conclusion of the paper. Divided in 5 aspects, regulation subjet, regulation object, regulation range, regulation method, and regulation rules, the paper discussed adequately to solve legally practical and theoretical problems like regulation subjet's absence or duplication of power, regulation object's market access & transaction process regulation misconduct and standard inconsistency, regulation range's too narrow and with omissions, regulation method's inappropriate or incomplete, and regulation rule's incomplete or lack of coercive power.