International Financial Derivative Transactions To Offset The Legal Issues

The financial derivatives develop on large scale, and playing more and more important role in the international finance. After China's entry into WTO, how to evade the risk of loss of the financial assets caused by the vicissitude of international market is a big challenge for our enterprises especially for the financial institution. So we must take positive and prudent attitude towards financial derivatives.Set-off is a "litmus test" of jurisdiction which indicates the leading and most accurate pro-creditor or pro-creditor attitude to insolvency. Set-off plays important role in international financial derivatives, even in the view of international capital market. Netting, as the developed form is most important and fundamental not only in the ISDA Master Agreement but also in the international financial market. Set-off is clearly identified in the ISDA Master Agreement, which is different from the set-off in the common legal context.This thesis adopts a combined approach of comparative law and cross finance and law to analyze set-off in international financial derivatives, emphasizing international factor besides national. Considering the complexity of the legal problem concerning international financial derivatives, with strong "international characteristic", the author introduces the authoritative and ISDA and its protocol, the recent development of ISDA 2002 Master Agreement, emphasizing the important role and significance of the set-off in the international financial derivatives,making comparison between set-off and netting then making basic judgments of the efficacy of set-off clauses in the domestic law in the countries. Considering there are many inconsistencies in the bankruptcy law and the law of security, this thesis provides suggestion for China to perfect the relevant legislation and regulation of financial derivatives before the derivatives emerging on large scale with the interest of China from different angles.