Study On Legal Problems Of Securities Transaction With Credit

Securities transaction with credit has become a indispensable section of a mature international securities market because of its merits of improving capital efficiency and increasing market liquidity. Meanwhile, it can help to solve many problems which has restricted the development of our securities market and to promote the amalgamation of the finance and the securities industry. Therefore, it should be the developing direction of our security market in the future.This article is divided into six chapters. The first chapter focuses on the issues such as the meaning and basic characters of securities transaction with credit while discussing its market effect and the possibility of its import into our securities market.Making clear its meaning is the precondition of going deep into the study on it. Thisarticle only means to caution money transaction, that is the financing'or borrowing ofsecurities by the broker or financial institution to make the transaction to be done during the securities transaction process. Securities transaction with credit possesses the characters such as communicating capital, credit diplex and finance lever, and the functions of increasing finance liquidity, delaying fieriness going up or down, offering obviate risk tools to the investor, and bringing income to the bill broker institutions in securities market.The second chapter has discussed the legal conformation of securities transaction with credit. Securities transaction with credit is an important transaction manner in securities market. The relevant legal relations are very complex andinvolve several aspects. There are uppermost three legal relations among the complex legal relations: The entrust relations, the debit and credit relations, and the assurance relations between the broker and the investor. The securities finance contract including the three legal relations mentioned above is the main legal writ among the participants in the securities transaction with credit. It has the content and quality of consuming debit and credit in civil law as well as the different characters compared with the traditional consumer finance contracts. Moreover, the situation may appear that one bond has two owners because of the borrow securities system This chapter also analyzes the problem of how to deal with the stock rights when the company discharges stock rights (interests) or convokes shareholder meeting.The third chapter has compared the international development and models of securities transaction with credit. There are three fashionable models in the world as follows: the market model just as the America model, the specialization model just as the Japan and Korea model, and the double-course model just as the Taiwan model. Each model has its rationality and bases on its particular social, legal, and culture background. Which model a country should establish must be decided according to its own situation.The forth chapter has analyzed the risks and possibility of securities transaction with credit in our country. Although securities transaction with credit is forbidden by our "securities law", it is widely exercised in our country because of the credit itself is a necessary factor of the market. The securities transaction with credit getting out of line is much different with the lawful one and could do much harm to our securities market. Meanwhile, just like a double sword, securities transaction with credit can bring double income to the investor while leading to double risk. In the present, securities transaction with credit is confronted with so many obstacles such as the legal limitation, the market environment, the credit lost, and the legal body and so on. We cannot refrain from doing so for fear of a slight risk. We have possessed the market environment and technical qualification of securities transaction with credit through more than ten years construction and development.The fifth chapter that has put forward the system design and legislation advice isthe main body of the article. As to the model of securities transaction with credit to be discussed, because of the ability of risk control is low in our securities market, none of the America model, Japan and Korea model, or Taiwan model is suitable for our country, the writer here recommends an amendatory Taiwan model. Under this model, the securities and financial company is the most important monopolizing hinge .It must qualify for some standards so as to offer credit. In order to control risk, the participant such as the client or the broker even the securities being transacted must qualify for certain requirements correspondingly. Moreover, this chapter has discussed the elements of securities transaction with credit.The sixth chapter is the political suggestion of securities transaction with credit. It has put forward the steps for opening securities transaction with credit, the opening and uniform evaluating system, the four class supervision system, and the market trend of securities transaction with credit. It is a chapter because of it is an indispensable part of our securities transaction with credit system though it is not within the law area.In the last, it is the conclusion that we should establish our system of securities transaction with credit according to our environment in order to promote our security securities market.