The Legal Supervision Over The Stock Index Futures Trading

The thesis, organized in four parts, primarily probes into the issue of legal supervision over the index futures.In Part One, the writer generally introduces the basic problem of the index futures trading. As a financial derivative instruments, a financial future revolving around certain stock index, the stock index futures is a standard agreement, according to which, the buying and selling parties thereof shall, on certain time, conduct stock index trading at the price as agreed therein. The stock index futures contract holds the following characteristics: financial futures basing on stock index, index point of the contract be representative and authentic, contract price demonstrated by stock index point and cash closing of the contract. The stock index futures in nature is a risk-avoided instrument. The foresaid characteristics endow the stock index future with the basic function of is risk-avoidance, price identification, abundant investment portfolio and intensifying the stability and liquidity of the stock market. The stock index future initially appeared in America in the beginning of 1980s, and was rather attractive to the investors and extended rapidly to the world wide. with respect to its various strong points. The stock index futures have been one of the financial products developing at the most rapid speed since 1990s. The emergence of the stock index future will be a big progress in building the capital market in China: firstly, it will contribute to the prosperity of our stock market, and secondly, it will promote the development of China capital market. To sum up, the promotion of the stock index future will lead to great changes in China capital market, even the whole financial market, which will be rather significant and profound.In Part Two, the writer sets forth general theories regarding the supervision of the stock index futures. Firstly, the writer emphasizes the necessity and importance of supervision over the stock index futures. As a future market, the stock index future carries the general characteristics as strong speculativeness, high risk, frequent occurrence of unfair trading, which call for supervisions prior to the promotion of the stock index futures. What is more important is that the stock index futures embraces certain special risks as in the aspects of trading object and closing manner, which requires of more intensive supervision over the stock index futures trading. Secondly, the writer generally states the objective and principle of supervision over the stock index futures trading. The four main objective of supervision over the stock index futures market are as follows: to protect the investors'interests, to ensure the fairness, efficiency and transparency of the stock index futures market, to reduce the system risk of the stock index futures market and to facilitate the harmonized development of the efficiency as well as the order of the stock index futures market. The primary principle with respect to the supervision over the stock index futures trading are the principle of openness, fairness and justice, the principle of behavior in accordance with law, the principle of appropriateness, and the principle of risk supervision and cooperative supervision.In Part Three, the writer focuses on the legislation and supervisory models for stock index futures market in certain foreign countries which enjoy advanced financial futures market, as well as the inspiration therefrom. Around the world, more than 90 countries and districts have set up supervisory institutions, and more than 100 countries have established self-regulation organizations in various forms, among which U.S, U.K, Japan and Korea are representatives. Firstly, the writer introduces of the legislation and supervising model of the U.S. With respect to supervision legislation in the U.S.,the legal system on stock index futures are composed of two parts, national laws and regulations governing futures and the exchanges'rules governing futures trading, both of which are complementary and cooperative by operating on futures markets in various ways, and therefore ensure the competitiveness, effectiveness and rationality of stock index futures markets. As to supervisory model, the U.S adopts the model of partition and cooperation. Secondly, the writer sets forth the legislation and regulatory model of the U.K.. With respect to supervision legislation in the U.K, the legislation on futures markets has been developing with financial supervision. The Financial Service and Marketing Law in 2001 by the U.K. , is deemed to be the milestone of the financial legislation, promulgation of which indicates that U.K adopts step by step the legal system with more uniformity and government intervention instead of the model of self-regulation.In respect of the regulatory models, the legal supervision in the U.K., in the early stage, paid more attention to the model of self-regulation by industry organizations, future exchanges, clearing offices and market participants. At present, with the development of financial globalization, the self-regulation based system has been gradually abandoned in order to acquire more market share, Thirdly, the writer brings forth the legislation and supervising model of Japan and Korea. The Japan's regulatory model has transformed from division supervision adopted in early stage to function supervision. While, Korea adopts single supervision model, according to which the supervision function are mainly performed by the Financial Supervision Committee (FSC) and the independent organization established thereby, the Stock and Futures Committee (FSC) .In Part Four, the writer elaborates in details the choice and consummation of China's supervising model for stock index futures trading. Firstly, the writer analyzes the current supervision conditions and the problems existing in the goods futures markets from the positive and negative aspects. Now, the China Securities Regulatory Commission (CSRC), China Futures Association (CFS) and futures exchanges make up of the three-level supervision model. However, there are certain problems in the foresaid three-level supervision model due to the short history of the futures market. Secondly , the writer demonstrates expounds the choice and construction of the supervisory model of China stock index futures market, as well as the responsibilities of the supervision institutions in different levels. The single supervision model, supervision primarily processed by the governments, shall be applied in China with respect to the supervision over the stock index futures market, i.e. CSRC responsible for the supervision over the financial futures market. Thirdly, it gives a picture of the consummation of the supervision model. The best supervision model will be nothing if it can not be carried out, so it is more important to put it into effect. Some measures should be taken in the following aspects in order to exploit the function of supervisory institutions: the CSRC shall make comprehensively apply the legal, economic and administrative measures when conducting the function of macroeconomic control; the CFS shall strengthen the function of self-regulation; the financial futures exchanges shall perfect its function of self-regulation and the credit system shall be consolidated in the financial futures market.At last, the writer, considering the fast and healthy development of the stock index futures when promoted in China, brings forwards corresponding legislation advice thereabout .