The Legal Regulation System Of Cross-market Manipulation Between Stock Futures Market And Stock Market

The intrinsic mechanism of market manipulation to control price fluctuation by fictitious market supply-demand relationship to make profit from trade price spreads remains unchanged.However,its implementation strategy is constrained by the capital market structure.In the isolated structure of capital market,the market manipulation behavior is limited to a single market and shows itself as a traditional one-market manipulation.The birth of financial derivatives has opened up the trend of capital market accommodation.The price correlation between stock market and futures market makes cross-market manipulation a new trend,and form two kinds of implementation modes: transaction mode and information mode.Trading mode utilizes the manipulation of stock index,directly fictions market supply and demand by trading behavior,controls market price,and pulls price fluctuation of related market through cross-market price related channel of stock futures to gain profits.The information-based model can induce trading time and direction by releasing information to the market,fictionalize market supply and demand,control market price,and pull the price fluctuation of the related market through the cross-market price-related channel of stock futures and cash to make profits.The integration of international capital markets has led to a more complex and covert implementation model of cross-border manipulation through cross-border price-related channels of capital markets.The volatility of commodity prices affected by supply and demand is the basis of market manipulation.The mechanism of controlling price fluctuation and making price difference for profit makes manipulation imply price fluctuation risk,and the risk is unsystematic in the isolated structure of capital market because it is confined to a single market.In the trend of capital market accommodation,the price fluctuation risk of cross-market manipulation is released along the cross-market price-related channels.In the pattern of comprehensive financial management,there are systemic spillovers across industries and institutions.Under the existing regulatory legal system based on financial separation system and capital market isolation structure,there are regulatory blind spots,which threaten financial security and imply double crises of market and rule of law.The reasons are as follows: firstly,there is a lack of supervision power,and the existing regulation of manipulative behavior is limited to the micro-level of behavior regulation and punishment after the event,and the prevention of systemic risk is lacking.Secondly,the allocation of regulatory power is unreasonable.The "inverted pyramid" regulatory structure with the absolute authority of the SFC and the inefficient regulatory coordination mechanism inhibit the regulatory efficiency.Thirdly,there are obstacles to the operation of regulatory power.The market segmentation-based regulatory framework lacks the overall regulatory vision,resulting in gaps in cross-market regulation,while the understanding of market essence of price control is alienated from the implementation mechanism and development trend of manipulation.The problem stems from the fact that the existing understanding of the nature of manipulation is confined to the perception of single market manipulation under the isolated structure of capital market.The regulation of market manipulation is limited to the micro-behavioral supervision level such as investor protection and punishment after the event,which can not cope with the systematic evolution of market manipulation price volatility risk.In view of this,the cognition of the essence of market manipulation should shift from price manipulation and price and volume control which focus on the result of manipulation,as well as fraud and market fraud which focus on the behavior of manipulation,to focusing on the implementation conditions of manipulation.The essential cognition of abusing market advantage can reconstruct the connotation of market manipulation supervision.On the basis of investor protection and post-punishment in micro-behavior supervision,it is conducive to integrating the concept of risk supervision,constructs the Framework of Integrated Supervision SystemFirstly,prevention is the key.The concept and system of macro-prudential supervision to prevent systemic financial risks are introduced into the design of regulatory system for manipulative behavior.Define the macro-prudential supervision responsibility of the People’s Bank of China in legislation and smooth the legal way of its supervision threshold covering the capital market.However,the vagueness of the concept of systemic risk makes it possible to abuse the macro-prudential supervision power.In view of this,Firstly,we should implement the design of checks and balances in the allocation of regulatory power and build an efficient cooperation mechanism of capital market supervision on the basis of the deliberation mechanism of the Financial Stability and Development Commission.Strengthen the exchange and sharing of regulatory information,curb the deviation of regulatory behavior,and build a "pyramid" market regulatory system with efficient allocation of regulatory resources and smooth flow of information.Promoting the international regulatory cooperation mechanism of cross-border capital markets at bilateral and multilateral levels.Secondly,limiting the boundary of supervision power in the operation of supervision power.Setting up an active defensive information supervision system around market advantages,according to the degree of risk of different types of manipulation,setting up a differentiated qualified investor system in capital market,classified supervision system for investors,cross-market large transaction registration system and other pre-defensive regulatory systems which will ensure that no systemic financial risks occur.Secondly,punishment is the bottom line,but the legitimacy of punishment depends on the established norms.Cross-market manipulation and single-market manipulation have the same intrinsic mechanism and behavior structure,but with the help of cross-market price-related channels,price control behavior and clearing profit behavior,which were originally confined to single-market,are separated into price-related markets without substantial independence.It can be governed by existing norms of prohibition of manipulation.However,the existing market segmentation prohibition system should be revised to cope with the new trend of cross-market manipulation.Firstly,we should strengthen the legislative cohesion,bridge the gap of cross-market supervision,and define the Securities Law and Futures Regulations as the basic law and special law of the capital market,covering the manipulation in the capital market in an all-round way.Secondly,it balances the safeguard and protection functions of norms,sets up “specific norms” with behavior mode as the core to regulate existing manipulation,and “authorization norms” with authorization discretion as the core to reflect future manipulation.Thirdly,under the principle of "substitution",effective supervision of cross-market manipulation can be achieved by differentiating the constitutive elements of dangerous crime,behavioral crime and consequential crime.