Study On Bankruptcy Issues Of Financial Derivatives Transaction

In consideration of the large-scale and the matrix pattern which lead to the fast risk transmission of financial derivative transaction ,in order to prevent the loss and risk of one party occurred in bankruptcy event is transmitted to the entire market and finally caused systemic risk and failure , many major financial derivative transaction organizations designed a series of specific institutional arrangements, such as netting, early termination, close-out netting and credit support arrangements. However , as the clauses of agreement between parties ,the validity and enforceability of these institutional arrangements in the bankruptcy proceedings is uncertain . The purpose of writing this dissertation is to find whether these institutional arrangements are compatible with bankruptcy law and to provide the legislative suggestions accordingly.In view of practice and study on financial derivative transaction especially related legal issues in China is relatively weak compared with those in foreign countries , therefore the comparative law method is taken in the writing of this dissertation for using for reference of successful practices of foreign countries.This dissertation is divided into four chapters:Chapter 1 is an overview of the background and principle of bankruptcy issues of financial derivatives transaction ,including the definition, development, classification, major organizations and relevant legal documents of financial derivatives transaction, some specific institutional arrangements related to bankruptcy such as single agreement, early termination, close-out netting and credit support arrangements, the significance ,consequences and special treatment of bankruptcy event in financial derivative transactions.Chapter 2 is mainly the analysis on the compatibility between the early termination arrangements and executory contract option in bankruptcy law .Chapter 3 is mainly the analysis on the compatibility between the close-out netting arrangements and the setoff provision in bankruptcy law .Chapter 4 is mainly the analysis on the compatibility between the bankruptcy avoidance and relevant institutional arrangements in financial derivatives transaction, such as netting payment, close-out netting and credit support arrangements.