Risk Management In The International Stock Index Futures Markets And The Enlightenment

The stock index futures is a variety of financial futures that taking stock price index as trade target. It came from the financial innovation in the 1980's and became one of the most important and successful financial derivatives. Stock index futures play more and more important role as a mature risk management instrument of international capital market.China's stock market has been a unilateral market, lacking of short-mechanism. This kind of structural defect may lead to abnormal development of the stock market. And stock index futures, as a hedging mechanism, is sure to be pushed out in our country. Because Stock index futures has these deal characters of high fluidity and big leverage, which is always be used as speculate tool, caused a lot of heavy losses and negative impacts on the stock market. Stock index futures is like a double-edged sword, not only disperses risks, but also brings investors and financial markets with new risks. If the risk of stock index futures can not be effectively controled and managed, it may not only destroy the futures market, but also affect the stock market. Therefore risk management of stock index futures markets is very importment. Now stock index futures is going to be pushed out in our country. At this very moment, a study in its risk management is of great significance, no matter in theory or practice. In this paper, the risk management of stock index futures of each country were more deeply analysed and studied. The writer learned from the advanced experience of foreign countries, and gave ideas and proposals for our own country.Stock index futures trading risk is an objective existence, and it has a wide array of sources, with a lot of kinds. And it is amplificative, chain, and testable. The main risks of stock index futures market are from price fluctuations, the leverage effect of margin trading, irrational speculation of traders and imperfect of market mechanisms. In this paper, risk management study of stock index futures is focused on both risk monitoring and risk-control.U.S.stock index futures market supervision mode is a dual three-tier supervision mode, with government regulatory agencies, industry organizations and futures exchange supervising together. There are two supervision organs in the government level. They are SEC and CFTC. The UK stock index futures market supervision mode is three-tiered regulatory, with the government, SFA and futures exchanges supervising together. The mode of regulation of futures markets in Korea is a single mode of monitoring, With FSC as its regulator. Similar to the United States, Hong Kong has a mode of Dual two-tier regulatory. The futures market is bound by laws and regulations both by the government and the futures exchanges. The mode of regulation of futures markets in Japan is the multiple dimensions of the three-tier supervision mode.Many developed countries have long history of stock index futures. And have relatively sound systems. Therefore we can learn a lot from them on risk control. International risk control measures of stock index futures are security system, grading the clearing system, up daily limit system, the system of the application of position limits and large trader reporting system.The potential risks of stock index futures market in China can be analyzed in three aspects: market environment, the main subjects of market transactions and market regulation. From the aspect of market environment, China's stock index futures market may have risk of excessive speculation, market manipulation risk, asymmetric market risk and transactions transfering risk. From the aspect of the main subjects of market transactions, most investors in the securities markets are short-term speculative small individual investors. Institutional investors account for only a small proportion. This situation will bring stock index futures markets of our country a lot of adversely affections. First, based on their financial strength, ability of mastering information, professional advantages, institutional investors are easy to manipulate the market prices, making a large number of individual investors become weaker in a passive position. Second, investors tend to operate short-term speculation, which may influences stock index futures hedging and allocating resources. Third, highly leverage and high risk make speculators an uncertain market. The capital of speculators flows quickly. And the stock index futures in their hands exchange frequently. So the stock index futures market is sure to have more dramatic price fluctuations. From the regulation, the stock index futures market in China may have policies risk, the system risk, credit risk and the risk of irregularities.Based on the analysis of regulation in international stock index futures markets, combined with the status of China's futures markets, China's stock index futures market should use the three-tier supervision mode, with the Chinese Securities Regulatory Commission, Chinese Futures Association and the co-regulatory futures exchanges supervising together.Learning from international stock index futures markets risk-control measures, combined with problems that may arise in stock index futures market in our country, in order to enable the stock index future to play its role, the stock index futures market risk control in our country can be analysed from three levels:the macro-level, the meso- level and the micro level.The macro-level. To strengthen the Construction of laws and regulations, to reduce government intervention and improve the futures industry's self-regulation. The meso- level. International risk control measures of stock index futures are security system, grading the clearing system, up daily limit system, the system of the application of position limits and large trader reporting system. In addition, in China, stock index futures risk control measures should also include membership approval system, the daily settlement system of non-liability, mandatory liquidation, inspection system and the reserve fund for risk and special reserve fund for risk system.The Micro-level. Rationally designing the futures contracts, making institutional investors be the main subject in the index futures market, and raising the ratio of hedgers. Investor should set a reasonable size for the funds, reasonably allocating funds, and controlling operational risk. To strengthen stock index futures brokerage firm's risk management is to strengthen the management of agents, strengthen the management of clients and strengthen the agency's self-monitoring and inspection.