| Financial derivatives,as outstanding achievements in the wave of financial innovation,have shown remarkable results in cost control,risk management and speculation arbitrage.OTC financial derivatives have also shown an explosive growth due to its characteristics of convenient way of trading,tailored product design and loose market environment.According to the statistics of Bank of International Settlement,the market scale of OTC derivatives accounted for about 90% of the global derivatives market,which was far higher than the market scale of Exchange Traded Derivatives.As of the first half of 2016,the nominal value of global OTC derivatives amounted to $544 trillion.However,it is just because of the above characteristics of OTC financial derivatives,the transaction information about basic assets,contract value and trading counterparties are lacked,resulting in serious OTC derivatives market bubble and even the "dominoes" effect once the crash occurs.Procter & Gamble's loss,bankruptcy of long-term companies,and even the 1994 Mexican Financial Crisis,the 1997 Asian Financial Crisis and the 2008 US Subprime Mortgage Crisis,are all affected by OTC derivative transactions.Therefore,strengthening and improving the derivative financial supervision while taking into account the financial innovation has become one of the major challenges faced by financial legal system reform in the post-crisis era.The United States released the “Dodd-Frank Wall Street Reform and Consumer Protection Act” after the subprime crisis in 2008,of which,Chapter 7 "Wall Street Transparency and Accountability Act" improved the regulatory system on OTC derivatives market from the aspects of adjusting regulator duties,strengthening internal controls of financing institutions,protecting interests of investors and promoting international cooperation.The EU also issued the “European Market Infrastructure Regulations” in 2012,which focuses on enhancing the infrastructure of OTC derivatives markets rather than the administrative intervention,in order to achieve the supervision on OTC derivatives market.In contrast,OTC derivatives market in China started late,and a huge gap still existed compared with the developed countries in terms of the market trading volume.Besides,China hasn't developed specific legislation for the OTC derivatives market,and the regulatory rules are mostly based on departmental regulations and normative documents.The development path of "research,the introduction of an approach and the launch of a product" is adopted,which can easily lead to the result that highly standardized products and strict trade subject qualification limit the motivation of financial derivatives innovation.Moreover,many problems in China's OTC derivatives market are still existed,such as the limited scope of central counterparty settlement,the imperfect information disclosure system,the incompatibility between NAMFII main agreement and current laws of our country,and the conflicts of supervisory power on cross-border derivatives.In this paper,the market supervision system of OTC financial derivatives is considered as the starting point and the foothold of the research;and the key research line and research goal are the improvement of the legal framework of OTC financial derivatives market regulation.This paper studies the emergence and development of financial derivatives,supervision system of financial derivatives in Europe and the United States and its reform process,as well as the current status of OTC financial derivatives supervision system in China;more importantly,it focuses on the depth of research,and expands the research to the legislation background and system connotation of OTC derivatives regulatory system in Europe and the United States.Finally,feasible recommendations regarding the regulatory system of OTC financial derivatives market in China is put forward on this basis. |
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