Research On Legal Supervision Of Financial Derivatives In China

With the global financial innovation’ promoting in the 1970 s, financial derivatives emerged. Financial derivatives are derived from and based on traditional financial products(such as money, stocks, bonds, etc.). And they are novel financial instruments. Derivatives were born with leverage future and virtual characteristic. This makes the financial derivatives have higher risk than normal financial products. If the regulation is not in place and some problems happen in the transaction part, it would lead to incalculable damage on a country’s economy and even the global economy.Therefore, in order to protect the financial derivatives safe and efficient, investors’ legitimates rights, and rapid development of the socialist market economy, China should continue to change the system to improve financial derivatives and strengthen the supervision of financial derivatives. To the start point with legal regulation of financial derivatives, this paper will specifically addressee in the following four aspects.The first part, introduction, through the background, purposes, research review, theoretical and practical significance of the study, etc. of financial products derived, into the topic gradually.The second part, the basic concepts and principles of financial derivatives are described. Through several financial derivatives crises, the papers try to analysis the risk, and arrive at the value of legal regulation of financial derivatives.The third part, the paper comment on some specific countries and regions whose financial derivatives markets are more mature from financial derivatives regulatory approach, information disclosure system, consumer protection and credit rating system. And sum up their successful practice in the field of financial derivatives system.The fourth part is the core of this article. The thrust of this writing is also located. In this part, the author analyzes the defects of our current financial derivatives regulatory system. Our multi-level derivatives bulls seriously affect the efficiency of the regulatory. Derivatives legislative standards of information disclosure system are not uniform, resulting in the use of conflict and implementation difficulties. Defects for consumer protection and legislation leads to difficult to remedy when the financial interests of consumers is damaged. Lack of independence of the existing credit rating agencies led to the rating results not objective and unfair. To protect the safe of China’s financial derivatives market, it is imperative to improvement the financial derivatives market supervision system and enhance the level of supervision. Mr. Lu has proposed "Bringing Doctrine", the author recommends learning experiences from the countries or regions whose financial derivatives market regulation more mature. Combined with the actual needs and financial market development status of China’s financial markets, try to improve the regulatory of China’s financial derivatives trading system. The author gives the feasibility proposal from reconstruction of derivatives regulation mode, improvement of the information disclosure system of financial derivatives,reconstruction of financial consumer protection and changes in regulatory regime of credit rating agencies in financial derivatives.