Legal Analysis Of Margin Trading System

With the declaration and implement of amended'Securities Law', the ban on margin trading which had lasted for long time in China was finally cancelled. As an effective trading tool in securities market, there are some shortcomings in margin trading, but the positive functions from it also can not be neglected. It's right time for China securities market to expand further. Due to having related legal condition, margin trading ought to be included into China financial system. Firstly, the author presented a brief introduction to the meaning, functions and shortcomings on margin trading. Secondly, trading systems in USA, Japan and Taiwan were generally presented. The last but not the least, after reviewing the history of margin trading in China and considering the present situation, some advices about the potential mode of margin trading in China are given. As a new comer in China securities market, margin trading has to face a lot of problems both on law making and on law enforcement. Therefore, the author analyzed and discussed three main legal relations and frequently-occurred legal problems of margin trading. Several kinds of illegal actions in margin trading were listed, meanwhile, some advices about how to regulate margin trading on law side were given at last.