A Study Of Supervision Legal System Of Chinese Bond Market

Chinese bond market has been developing for more than twenty years. Market scale, bond products and extend of market participation have gained a rapid development. With the strengthening of social and economic influences of the bond market, the recognition degree of Chinese government to the bond market has also been improved. Therefore, the importance of bond market supervision has been acknowledged. Although bond market supervision in China has achieved remarkable success since 1990, there still remain many problems. Multi-supervisory institutions make against market development. There are also many problems in the supervision of market behavior, such as incompletion of laws and regulations, use of administrative means in supervising, multi-institutions in the settlement and registration, incompletion of risk control etc. As far as bond investor protection is concerned, there are problems of difference of law hierarchy, incompletion of legal protection. Therefore, it is necessary studying in bond market supervision legal system to put forward suggestions to improve the level of supervision.The thesis emphases in the study of supervision legal system of Chinese bond market. From the writer's point of view, it's of the same importance studying the legal system as researching the reasons behind it. Theory of welfare economics gives the theoretical basis on government supervision of the bond market, however, it does not discuss the completion of government supervision. Public choice theories such as Arrow's impossibility theorem,rent-seeking theorem argue the government failure, because of which the problems such as disunity of supervisory institutions, insufficiency of investor protection in Chinese bond market come into being. Only on the basis of the recognition of supervision incompletion, and by empirical analysis and persistent improvement of legal regulations, can exert the positive incentives and function of safeguard of the bond market supervision, and can realize the supervision aims, which are bond market investor protection, bond market transparency, fairness and efficiency, and risk control.There are seven chapters in this thesis. The first chapter is an introduction to the thesis. The second and third chapters are about the theoretical analysis of supervision incompletion. The fourth, fifth and sixth chapters are of the empirical analysis of the supervisory institutions, market behavior supervision and bond market investor protection. In the last chapter, the writer brings forward some suggestions to improve the supervision on Chinese bond market.In the first chapter, the writer discusses not only the significance of topic selected, but also the research thinking, research methods and structure of the thesis.The second chapter is about the theoretical analysis of supervision incompletion. Theories of welfare economics, interpretating government supervision and law incompletion make conclusion of the necessity of government supervision on the consideration of externality, public goods, monopolization and information asymmetry. Public choice theories such as Arrow's impossibility theorem, rent-seeking theorem, supervision cycle theorem and interest group theorem study from different angles and find the supervision incompletion.The third chapter is about the formation mechanism of supervision incompletion of Chinese bond market. There are many interest groups in the Chinese bond market, including supervisory institution interest group, bond issuer interest group (and also institutional investor interest group, bond market servicer interest group) and personal investor interest group. There exist interest conflicts between those groups, sometimes even within one group. The main interest conflict in Chinese bond market is the interest conflict between different supervisory institutions, which is illuminated by the medium-term bond event in 2008. The regulator limitation of information and capability are also one of the reasons of supervision incompletion.The fourth chapter sees the empirical analysis of legal supervision of Chinese bond market supervisory institutions. There are three markets—interbank bond market, exchange bond market and over-the-counter bond market——in China. The supervisory institutions include the Ministry of Treasury, People's Bank of China, China Securities Regulatory Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission, National Devolopment and Reform Commission. However, in the developed countries, bond market supervisory institution is usually unique. The existence of multi-supervisory institutions will bring about the market inefficiency and supervision inefficiency.The fifth chapter is about the empirical analysis of market behavior supervision of Chinese bond market, including bond issuing, settlement and registration. As of the conclsion, the writer points out the existence of problems such as incompletion of laws and regulations, use of administrative means in supervising, multi-institutions in the settlement and registration, incompletion of risk control etc.The sixth chapter is about the empirical analysis of bond investor protection in China. To protect bond investor, especially personal investors, is one of the main aims of government supervision. The legal investor protection concludes three parts: contract law protection, economic law protection and securities investor protection fund. There are also some problems in investor protection in China.To recognize the supervision incompletion does not mean the useless of supervision. Contrarily, it awakes us of significance of the incessant improvement of government supervision. In the last chapter, the writer brings forth some suggestions. First and most urgent work to do is to unify the supervisory institutions. Secondly, it is necessary to examine existing laws and regulations to elevate the legal system of Chinese bond market. Lastly, the writer makes suggestion in the bond market behaviour supervision, self discipline and supervision, risk control and investor protection.In the whole thesis, the writer mainly use the systematic method by discussing the legal supervision incompletion in institutions, market behavior supervision and investor protection. Other research methods include semantics method, empirical method, comparative method and history method.