Study On The Legal Problems Of Error Trades Cancellation Of Securities

The securities market is the capital market. There are many risks hidden in this market, and exposed with the rapid development of securities markets which turn to threats of the global financial market. To protect the interests of investors and society is a basic purpose of securities legislation, but in recent years, the occurrence of Oolong and the increasing technical failure in stock market not only damage the order and function of securities market, but also cause serious loss of interests of stockholders.Error trade of securities is an abnormal phenomenan in trading activities of stock market. According to analyze the error trade incidents both in Chinese and foreign securities market, we can find out that the increasing technical failure and human error, such as misunderstanding and unfair results, have become the main reason for error trading, which also challenge the legal system of securities market. How to find an effective way to prevent and regulate error trade under the new circumstance is a big and difficult problem the regulatory agency faced, especially the establishment of the system of error trades cancellation.The establishment of the system of error trades cancellation of securities is the results of the balance and coordinate of order and fair value target. As a way of disposal securities trade anomalies, it plays an important role in the external stock market. But in the internal stock market, this system is still a blank, and the securities legislation has nothing on this respect. For these reasons, the China’s securities legislation is necessary to assure the Stock Exchange has enough power to dispose error trade, and make more flexible and efficient regulatory measures. The first and the most important thing is to establish the system of error trades cancellation.In the eyes of law, there is a series of problems the regulatory agency need to solve. Such as, how to design the cancellation which conforms to our securities market circumstance and structure is a real but urgent problem cannot be ignored, the rules of application conditions, its disposal procedure etc.. According to compare and analyze the practices of the foreign Stock Exchange, we can centralize the system of cancellation on three problems. The people, the application conditions and the disposal procedure, which are the fundamental and critical legal issues of securities error trading we need to discuss in this paper.