The Practical Meaning Of Warrants On The Development Of Our Security Market And The Transaction System Of Warrants' Improvement

Warrants which has a long history and active transactions, is a financial derivativeproduct in the world financial markets. In the course of the development of financialderivatives in overseas capital markets, warrants with its unique product design hasbecome a preferred derivative product in each country or region. In recent years,investors have increasing demand for innovative products .The competition in StockExchanges for product development is gradually vigorous. Countries or regionsintroduce varieties of warrants products one after another.Although China's capital market is beginning to take shape after more than tenyears development, it is still an emerging market and in the transition phase. Itprimarily is a stock market, with bond market underdeveloped, and lacks of financialderivative products. The overall structure of the capital market is still imperfect. It isimperative to timely introduce innovative financial products to promote thecomprehensive development of the securities market. Warrants, as a primary financialderivative product, could serve as a stepping-stone for the development of ourfinancial derivative market.Warrants appeared in china ten years ago, but because of the deficiencies of thedesign for products variety, coupled with weak regulation, the phenomenon of sharprise and fall appeared, which ultimately led to cessation of warrants transaction.Accompanied by domestic reform of the shareholder structure of listed companies inAugust 2005, warrants which appeared as a payment of consideration become one oftransaction varieties in china's stock market. Although the warrants products haveabundant chances of future development, it is just a start. The imperfect rules and thedeficiencies of market mechanism, have made constraints to the development ofwarrants market's development.This thesis firstly discusses the basic theory of warrants from six aspects: definition,classification, development, identity, values and effect factors. Then aiming at theactual situation of the securities market in our country at present, it analyses thepractical meaning of the warrants on our security market from four aspects: investor,issuer, the function and structure of the securities market, and the reform of theshareholder structure of listed companies. Finally using overseas successfuloperations for reference, this thesis makes suggestions for our transaction system atpresent.In light of China's actual, this thesis aims to analyze the positive meaning ofwarrants to the main roles of market in the development process of China's securitiesmarket , through the basic theoretical research of warrants which as a derivativeproduct has rapid development overseas. At the same time, drawing Europe, HongKong and Taiwan's transaction systems, the thesis improves our existing transactionsystem, hoping of the primary financial derivative products to be better using for us,and to have a positive and far-reaching significance meaning on other financialderivative products in China's securities market.