A Study On The Legal Regulation Of Illegal Margin Trading In China

The “illegal margin trading” is a unique phenomenon in China,of which There is no clear definition under the existing Chinese law.This term comes from the credit trading in the secondary stock market,and it is a specific reference to “financing” in the“margin trading” approved by Securities regulatory authority.Illegal margin trading has violated the rules on “business qualification” and“account management”,which is also the consensus of regulatory authorities and the supreme court in China.Especially,As a form of non-compliant credit transactions,just The behavior of operating has been judged illegal.That is,the focus of illegal margin trading regulation is to punish and restrain the operators.Combined with the concept of Legitimate credit transaction in China,the illegal margin trading has destroyed the legal interest of good order in securities market,which is an operation behavior that does not have the legal qualification to operate margin trading as an agent for the investors.In 2015,due to the excessive expansion of the illegal margin trading,Leverage is extraordinarily high,which is considered as the key factor leading to the “stock market crash”,it not only has Disturbed the market order,but also distorts the resource allocation function of the financial market,and seriously damages the development of China's real economy.In recent years,the regulation of the illegal margin trading is the focus of financial supervision,and also the difficulty in optimizing the institutional arrangements for the development of the capital market in China.In addition,with the deepening transformation of China's economy,it is also one of the management difficulties that need to be solved to improve the governance capacity of the securities industry.As an indispensable part of China's financial system,the Maintenance of transaction order is not only a major challenge to the socialist rule of law construction,but also a core issue to improve and innovate the theoretical system of social governance.Illegal margin trading is extremely local characteristics in our country when talking about securities practice,the regulation research of which has strong practical significance.The current situation,activity rules and development trend of regulation reflect the deficiency of effectiveness.which is review of traditional solution.Over the years,due to the the lack of practical experience,There are many misunderstandings about the connotation and extension of the concept in the study on the legal regulation of Illegal Securities Margin Trading or risk response,specially in the explanation about the use value of rules from overseas.the analysis of principle and tools in regulation has Arrogated the basic logic of legal research,which not only did little help to sanction the illegal behavior,but also leads the related research of the theoretical system of governance of China's securities market astray.As for the practice of the legal regulation,the thought of judicial adjudication is inconsistent with that of administrative supervision in regulation of illegal margin trading,which is one of the specific reason for the weakening supervision effectiveness and prominent in the legal regulation.the main method of this kind of behavior violated the judicial referee subject interests lack of accurate understanding,lead to the regulation of behavior results deviated from financial regulation goal and unable to form a unified evaluation and effective guidance;Moreover,the research on relevant law theories is mostly limited to the compliance risk of market operation and the content of legal rules,ignoring the connection and echo between judicial practice and financial supervision.Therefore,the theoretical research errors and the lack of systematic theory lead to the stagnant research on the legal regulation of illegal margin trading in China.However,the emergence and long-term persistence of illegal margin trading in China is the result of repeated game of multiple interests,which is rooted in the structural factors and systemic diseases of the market.Therefore,discussion and research only from the technical level of legal regulation system structure cannot effectively resolve the aforementioned dilemma.First of all,legal regulation is an organic component of financial supervision system arrangement,including a series of activities from legislation,law enforcement to judicature.It should consider the current social structural factors in China,as well as the existing resource conditions and the principal contradiction of social and economic development in the deepening period of economic transformation.In addition,The aim,content and form of regulation are studied based on local conditions.Secondly,at the basic theoretical level,the introduction of economic principles to analyze the subject,object,object and the nature of the legal relations of illegal margin trading activities;The theory of public choice in political economy can provide theoretical support for the legal regulation of this behavior,which is helpful to broaden the perspective of legal regulation research and demonstrate the necessity of regulation.It is worth noting that,after the subprime mortgage crisis,the reconstruction of the theory of global financial regulation is mainly to strengthen the intervention and control of the market;But,as to the stage of capital market development in China,the whole architecture of the financial system and industry operation mode in terms of innovation and development law,state intervention in the “control” theory is not suitable for study and solve the current block the main problems of China's securities market development and innovation,and the current regulation performance preference of market regulation excessively,not only failed to sanctions trading behavior or eliminate shackles of industry development,has become the industry “low balance”to speed up the key cause of circulation stimulation.The market disorder caused by illegal margin trading essentially reflects the lack of effectiveness of the overall industry governance;the study of which legal regulation system should begin from the national system of governance thinking adjustment or correction,and the research should fit the national conditions,the objective evaluation and assessment of the current institutional arrangements for the historical significance and current effects,andPay attention to the current national social governance system reform of the relevant theoretical system innovation link and echo.In conclusion,the destruction of the legal benefits of the good order of the securities market by the illegal margin trading may lead to systemic risks,and the research breakthrough of its legal regulation is not the repair of the original legal system or the construction of specific legislative techniques.The fundamental difference between the financial system or financial regulation of China and developed countries is not the application of basic financial instruments,but rooted in history,political system,endowment and credit system.Therefore,the innovation of regulations and the improvement of the effectiveness of regulations should first clarify the multi-agent interest game in the supervision of capital matching transactions,so as to accurately locate the key to causing illegal behaviors.Secondly,the development level of regulation theory should also be fully connected with the reform goals of national governance model transformation and governance capability modernization,so as to optimize the institutional arrangement related to legal regulation under the framework of national governance theory.This paper has 7 chapters,the specific content is as follows:The first chapter is an introduction,which introduces the origin and purpose of this study.This paper summarizes domestic and foreign scholars' research literature related to illegal margin trading,and summarizes the research context,research dynamics,research status and existing problems in this field.In the research methods,empirical research and normative research are mainly used.The basic theories used in the analysis and argumentation are economics and political economy.At the same time,this paper points out the innovation points and shortcomings.The second chapter is the determination and interpretation of the research object.This chapter will clarify and analyze the behavior attribute,basic concept and localization connotation extension of “illegal margin trading” in combination with practice.Identification and classification of illegal margin trading behavior;The legal regulation and its methods establish the logical premise and the boundary of the discussion domain for the development of the following text.Chapter three analyzes the necessity of legal regulation from theory and reality.It is divided into theoretical basis and practical basis.Among them,the theory of “rational individual” in economics is the starting point of the theoretical basis of legal regulation.The relationship between individual and group(collective)in the theory of public choice reveals that the aggregate of individual rational behavior will lead to collective irrational result preference,and the realistic foundation of capital legal regulation is the realistic necessity of illegal margin trading regulation.How to resolve the game conflicts in social relations that lead to low equilibrium of economic development,and how to optimize the management cost to achieve “co-governance” under the new economic normal,need to be implemented in specific institutional arrangements through real regulatory interaction,change of governance ideas?The basic goal and purpose of legal regulation should not only be to alleviate distribution conflicts and eliminate compliance risks of actors,but also to provide guarantee for the realization of the overall goal of market governance.Only in this way can the combined forces of regulation in national governance be formed and the effectiveness of market supervision be improved.Secondly,the second part of this chapter is the realistic foundation of the legal regulation of illegal margin trading,namely the realistic necessity of the regulation of illegal margin trading activities?The fourth chapter summarizes and comprehensively evaluates the main forms and effects of the current legal regulations on illegal margin trading,and elaborates and analyzes the main problems and their root causes in the current regulatory situation.This chapter is divided into two parts.The first part,from the expression form and basic state of the problem,first from the technical point of view,in the regulation basis,judicial practice,administrative law enforcement and other aspects to summarize and reflect,which is the obvious defects and the basic reason of weak legal regulation,but also the traditional way of thinking and analysis of research on legal regulation related issues;In order to accurately explain the root cause of insufficient effectiveness of legal regulation,the second part of this chapter analyzes the governance difficulties and difficulties related to illegal margin trading in the governance of the securities industry,revealing the deep-rooted obstacles that are difficult to eliminate the illegal behavior and the negative consequences of the long-term existence of such defects on legal regulation.The fifth chapter is about some countries or regions about the credit transaction or capital market governance related regulatory system and its enlightenment.As“illegal margin trading” in the stock market is a localized concept in a specific context in China,its implied behavior has a special reference.The economic behavior of“illegal margin trading” is essentially credit trading or “leverage trading”.This chapter compares the regulatory practices of credit transactions in the United States,Japan and Chinese Taiwan in order to draw useful reference from the regulatory experience of credit transactions to the current legal regulatory practices of illegal margin trading in China.The sixth chapter discusses the legal regulation path of illegal margin trading in China and puts forward some Suggestions for improvement.This chapter proposes that the basic concept of legal regulation should be connected with the concept of national governance and industry governance,and form a scientific and reasonable response.The aim of regulation is to maintain the good order of the securities market.The regulatory effectiveness has two levels of “control” and “guarantee”,that is,the legal regulatory system of illegal margin trading is an organic component of the institutional arrangement of China's modern governance system,as well as the implementation guarantee of optimizing other governance institutional arrangements.In order to achieve the above-mentioned goals and effectiveness,the paper discusses and proposes Suggestions on legislation,law enforcement and judication.it hopes to promote the formation of the endogenous stability mechanism of the market.Chapter seven is the conclusion,which restates the traditional governance concept and the influence of management path dependence on financial supervision and legal regulation.Legal regulation as one of the regulation of security and stability of the securities market order form,should be and the promotion of the concept of governance ability unifies,the concept of implementing regulation transformation and upgrade,from “substantial justice” and “order law” perspective,will also produce a clear venation of rules and regulations,safeguard the deepening of China's economic transition smoothly.