Legal Study Of Supervision On International Financial Derivative Instruments

Occurring in the seventies of the last century, the international financial derivatives are financial instruments based on the traditional basis. Traditional financial instruments are mainly currency, stocks, securities, commodity prices, interest rates, exchange rates and other indices, etc. By contrast, the types of financial derivatives are mainly future exchanges, the stock price index futures, mortgage securities, convertible securities, warrants, covered warrants, commodity futures, swaps and so on. The types of financial derivatives have been in continuous innovation and restructuring among the various derivatives. Variation is often the case so that it is very difficult to define the types of some kinds of the financial derivatives. It can be compared that the international financial derivatives in international financial markets are the products of "high tech", they appear due to the need to hedge, that is,increasing the value, avoiding a variety of market risks. However, this is indispensable to meet the needs of the psychological speculation, speculators in accordance with certain kinds of information on future movements of financial instruments to make judgments basing on the purchase of financial derivatives, and at the same time trying to get high profits assuming the risk of making mistakes. Financial derivatives in financial markets enhance the credit chain, which also will increase the risks. In particular, excessive speculation serve the trading of financial derivatives as a gamble and makes a serious threat to the stability of financial markets and their own survival.Moreover, financial markets and other economic areas link closely, once the financial crisis occurs, it will soon spread to virtually all industries,the U.S.financial crisis this time is a very clear example.Financial derivative instruments shall increase in value against market risks,and after several years of development, they have been a very important part of the international financial markets. During these several decades, although suffering many painful lessons, nobody can deny that the international financial derivatives make a great contribution to the international financial markets. Just because of the emergence of financial derivatives, the international financial markets are unprecedented flourishing.Therefore, the international financial derivatives are double-edged swords, how to better play their positive role and minimize their negative impact is an important issue for national legislators to consider. In fact,many countries, especially the United States which is the leader of financial derivatives market has been working in this field in legal regulation, and many international organizations have also made a lot of useful efforts. Whereas, the lag of the law, coupled with the development of the international financial derivatives lead to a crisis occuring so rapidly that the authorities are often unprepared. Based on strong internationality, the regulation of international financial derivatives must be under close cooperation by all countries, mainly by the relevant national regulatory authorities jointly to develop internationally harmonized regulatory standards. The current work in this area is undergoing swiftly and violently. Types of financial derivatives in China are limited, the market is very immature, and the legislature is in a fragmented state. But in consideration of our financial markets and the financial markets of the world which have been very closely linked and the expanse of the development prospects, China should speed up the establishment for its own legal system regulation of financial derivatives.The first chapter introduces the basis of the international financial derivatives theory, including its definition, characteristics, formation and development and summarizes its legal characteristics.The second chapter expounds the international financial derivatives on the need for regulation and supervision of the academic approach to their existing disputes between the existing parties.The third chapter describes the relevant international organizations to the international regulation of financial derivatives legislative attempts, such as the Basel Committee, Bank for International Settlements, the Commission and other international organizations.The fourth chapter introduces the representative national and regional regulation of financial derivatives status of legislation,such as the UK and Hong Kong of China. Chapter five, after describing the status of legislation of the financial derivatives in China, combined with the legislative experience of major developed countries and the main provisions of relevant international organizations and fully considering the national conditions of China, proposes the establishment of financial derivatives in China's legal system related to the proposed regulation and countermeasures.