Legal Research Of Supervision On Financial Derivatives Markets

Financial derivatives market is a new market deriving form traditional financial markets. Its development is depends on the profound historical background and social economy factors. After the 70's of the 20th century, when financial derivatives help people to manage risks and accelerate the integration of international finance, its own risks attract more attention form market. Especially when we enter into the 90's of the 20th century, almost every international financial storm has direct or indirect relationship with financial derivatives. Herein financial supervision organizations and financial derivatives dealers of different countries treat the construction of legal supervision system on financial derivatives market as a new research topic.After China's entrance into WTO, great changes will consequentially take place on our financial markets, which is joining up with international financial markets. Especially in the field of financial innovation, there is great potential contained in China's financial markets. Financial derivatives market will achieve speedy development both in varieties and market scope. Of course, at the same time, this new market will confront flinty challenges. Therefore when we develop financial derivatives markets for the progress of our financial system and collaboration with international markets, we also should attach importance to the strengthening of the legal supervision system on financial market.Correspondingly, this article starts with the introduce of financial derivatives' definition, varieties and backgrounds, based on the basic theory of legal financial supervision, and analyzes characteristics of different supervision systems between several typical developed countries or regions. Then based on the investigation into the collaboration between relative international organizations, author brings up a design for the construction of China's legal supervision system on the financialmarket form the practices of our countryChapter one concerns the general introduce of financial derivatives market as the base of the whole thesis. First of all, author divides financial derivatives into three categories according to the different exchanging modes, characteristics of underlying assets and exchanging places, after the clarification of its conception. With the analysis on its development history, author demonstrates the interaction between financial derivatives and its legal circumstance. At the end of this chapter, its legal characters as contractual, promissory and bi-obligatory, unreal trading objects, party autonomy, and chance contracts, will be analyzed.Chapter two analyzes legal financial supervision theory as the elements for the necessity of strengthening the legal supervision on financial derivatives market. This part starts with the discussion of risks (market risk, credit risk, liquidity risk, operation risk and legal risk), which confronted in the financial derivatives trading and legal theory of supervision on financial markets, the necessity of supervision is explained. Then, author explains the definitions of financial supervision and financial supervision law in order to clarify the objective system of legal financial supervision. At last, author compares different opinions for the legal supervision on financial derivatives market form the theory argument, and make it clear that the relationship between legal supervision and autonomy should be harmonized in order to prevent the negative effects brought by legal supervision.Chapter three compares the characters between different supervision systems in developed countries and analyzes the cooperation among various international organizations. With the summarizing of advantages and disadvantages of those legal systems, common features of different supervision modes are found out for us to consult. Then based on the introduction of necessity of international cooperation, efforts on perfecting supervision made by Basle Committee, IOSCO are researched, herein to illustrate the great significance of collaborations and developing tendency in this field.Chapter four concerns the author's perspective on the construction of legal supervision system in China's financial derivatives market. After the review onexperimentations of financial derivatives in china's history, the main problems existing in china are summarized. In order to insure china's financial derivatives market steps into a moderate and sound developing direction on its springboard, author analyzes significance of the development of financial derivatives market in china and then brings up a tentative plan for its progress on legal supervision system.At the end, author concludes and summarizes the main viewpoints of the article, and again emphasizes the development of our financial derivatives market based on the well-established legal supervision system.