Study On The Margin Trading System Of China

As a mature securities transaction system overseas, the margin trading is a very important transaction method, and adopted by the securities market of many developed countries and regions. It can improve market liquidity, reduce the influence of market fluctuation, and find proper market price and hedge. So it is important for our securities market to introduce the margin trading. Margin trading has many positive roles to the development of our Securities Market, but at the same time, its risk is much bigger than other ordinary trading. It needs to be controlled properly using the self-discipline and other regulation methods.In March 2010, we started the experimental stage of the margin trading in our country. Now during the first year of the margin trading, the whole market appeared to be very cautious. But at the same time, some problems arose. Such as the scale of the margin trading is too small to perform its function, the level of the law which regulate the margin trading is low, and the protection of the investor is not enough. So when the trading will become a routine business, we should analyses and solve the problem.In the introductory part of this article, the writer proposes the significance, the background, the literature review and the research methods of the selected topic. In the first part of this article, the writer analysis some problems existing in pilot phase of margin in advance. In the second part of this article, the writer analysis the basic content of margin and make a brief introduce to its usefulness from positive and negative perspective. In the third parts, the writer analysis the legal relationship of margin, including debtor-creditor relationship, fiduciary relationship and guarantee the legal relationship between securities companies and investors. In this part, the writer pay more attention to the sponsorship for it is complex and controversial, including different classification to the nature of the sponsorship and the advantage in margin of releasing guarantee.In the fourth part, the writer focus on analyzing the characteristics of margin trading patterns in different countries and areas, including America, Japan and China's Taiwan, then the writer gives the reason why the centralized credit model is consistent with the reality of the actual situation of the current selection and introduces the present system of margin status from the aspects of the qualification, underlying securities, deposit system, account system and regulatory system.In the fifth part, the writer proposes the suggestion for perfect the margin system on analyzing the problems identified from the pilot phase. The suggestion including put forward more rules to standardize the management of margin trading business, establish refinancing institution as soon as possible, detail the conditions of forced liquidation, strengthen protect the investor rights and so on.