Research On Legal System Of Market Makers Of Financial Derivatives Market

The development of modern economies is characterized by the virtual nature, which is mainly reflected in financial derivatives market with the further economic development. The financial derivatives market, a newly innovated system for trade promotion and risk prevention, enhances greatly the economic development and changes human's economic life with the multiplication of wealth. Influenced by the virtual nature, however, financial derivatives market bears huge risks unavoidably - a minor negligence of the risks may result in a disaster. The financial disaster breaking out throughout the world since the appearance of financial derivative products in 1970s are the best examples.With the economic globalization, countries all over the world may share the development benefits together, but they may also be bounded in a same disadvantageous train, from the point of which, the financial crisis that once swept the whole Asia gives us a lesson.Based on the consideration of the above two points, undoubtedly, China should"keep up with the world"on one hand and make proper arrangements that conform to the country's current situation against the new trends of world financial development on the other hand with China's entry into the WTO and especially the opening up of domestic financial market. The establishment of the Shanghai Exchange of Futures Trade in September 8th 2006 and the promulgation of the Bylaws of Regulation of Futures Trade in March 6th 2007 should be out of question the signals of the speeding up of the development of financial derivatives market of our country. The development and system arrangement of the Westerners so-called market that"favored by devils and angels together"is the center of financial work of Chinese government on the present stage.Because of the retardant establishment and insufficient development of the financial derivatives market of our country, the market is less active and hard to control the risks effectively, so, the settlement of the two problems should be the preconditions of the giant development of the market. The market maker system, which has been proved to work effectively in the developed markets, can solve the above two problems comparatively harmoniously. Therefore, the author believes that the introduction of market maker system accords with the overall benefits of our country's financial derivatives market. This paper makes theoretic argumentation of the introduction of market makers in the financial derivatives market of our country and makes system designs at a certain degree with the usage of various analysis methods such as comparative analysis, historical review, legal economic analysis and theoretic study with practice.The paper is divided into four chapters. The main contents are briefly introduced as follows:Chapter One: Brief introduction and analysis of function of market makers of financial derivatives market. Firstly, the author analyzes the characteristics of financial derivatives market, introduces its risk characteristics, points out the necessity of the development of the market in our country. Secondly, the author comparatively analyzes the characteristics of market makers in the market. Lastly, the author discusses and analyzes the main functions of market makers.Chapter Two: The legal relationship analysis of market makers of financial derivatives market. In this chapter subject analysis and relevant legal relationship analysis of market makers at the legal point of view are made. Furthermore, the author analyzes the relationship of market makers at the different point of view by Civil Law and Economic Law.Chapter Three: The risk control and legal regulation of market makers of financial derivatives market. In this chapter the author discusses and analyzes the risk of the market makers and gives the suggestion of control. Then legal analysis of necessity, object and methods are made.Chapter Four: The Legislation selection of the introduction of market makers in the financial derivatives market. This chapter makes jurisprudential analysis of the introduction of market makers in China, basic system arrangement of the introduction through the consideration of the real practices in our country, and the law making suggestions of this system.