On The Double Futures Trading Legal System Remodeling

Our country's futures market, developing from its seed, only passed through nearly 20 years, until now it's still in initial stage. After experienced the chaotic period, the transaction risk and the atrophy of exchange volume during the 1990's, the government has hauled the futures market back to the normal movement track gradually by using national macroeconomic regulations and control. Recently, future market is reviving and the exchange volume is increasing gradually. But in the futures market, the high risks, the lack of transaction noble and market regulations make this market full of problems. Under this circumstance, how to prosper our futures market, simultaneously avoid the risk which was created by the system design, which has become the main question that we considered.The concept of "dual trading", originates from US "Commodity Exchange Act" fourth. Dual trading is defined as: When the futures commission merchant or the floor broker executes the clients' order, meanwhile they execute their own account, the carte blanche account and the correlative account at the same time, same market. Because of the advantages of the dual trading, such as increasing exchange volume, enchancing the market's fluidity, reducing the costs of the futures commission merchant. Dual trading is permitted in US futures market and some other developed countries. But in China, dual trading is forbidden. Why? The author is trying to explain its advantages and disadvantages from different aspects.The positive effect of dual trading to the futures market mainly manifests enhancement of market efficiency, but the negative effect is that it could be harm to the market security, and the fair value. Therefore, The choice of legislation of dual trading is to choose different values. If the law allows to execute "dual trading", we need to take advantage of the positive effects and avoid the negative ones at the same time. But how? Futures transaction is much more difficult than the spot transaction, the legal relationship is much more complex, So, it's a hard to legislate. After the concrete analysis, we need to imitate the developed countries' legal pattern of controlling dual trading and form our effective legal pattern with permission of existence of dual trading.The establishment of a system, has inevitably experienced a certain process and practice. The article has detailedly illuminated the process of legislation about dual trading in our country. The author's intention is to explain what the system reform bring to the futures market. Our attitude is from absolute permission to absolute forbiddance. But the strategy which we are now picking does not accord with the discipline of market developing. We need to choose "strict limit, moderate permission" as a principle and bring legislation of dual trading to the right way.To exercise the rights, it has a certain boundary, and there is a kind of tendency that it's possible for any fights to be abused without perfect laws and regulations, How to prevent to abuse the rights, has become the most important question of regulating the dual trading. The abuse has many manifestations, such as the futures commission merchant execute self-management instructions earlier than the clients', improper use of the clients' transaction information, unfair distribution of the transaction results and so on. These behaviors all are harm to the investors' benefits and the justice and stabilization of the futures market. Then the author put forward a series of legislation proposal: such as to carry out classified management, establish all-around futures commission merchant with rational structure and prominent function, to execute the legal system of account separation and so on.As we know, no legal system can survive for a long time without provision of legal obligations, So, this article also provide civil and administrative punishment for those who abuse rights of dual trading. All of this above represents that if we establish a scientific legal system, We can benefit more from the existence of dual trading.