Futures Margin System

As the core of the future exchange, the margin requirement has an important role among future exchange laws and regulations. due to differences in each country future exchange with regard to its level of development, its legislation mechanism and the differences of rules made by each future exchange center, the thorough research on the margin requirement is difficult. The article deems that any principles, rules, and even operational customs shall be the necessary components of the margin requirement.As the capital by a future trader submitted in accordance with certain future exchange rules for the purpose of settlement and performance guarantee, margin is attached to a future transaction from the beginning to the end. Margin is essential to the determination of legal relationships among different future transaction parties. In a simple future agent relationship, the realization of the ownership of margin requires the assistance from the agent in the preparation period of a future transaction. During the future transaction period, ownership as the consideration of a sales contract also manifests different characteristics from an ordinary object of a sales contract. In addition, the operation of margin differs in different future transaction system. China needs to improve the regulations on the margin requirement, including the areas, such as parties to which margin relates, the method of which margin shall be charged, and the procedural respects. The goal of researching the margin requirement is to solve the typical issues such as mix-use, overdraw, embezzlement which are prevalent in the margin management, and, further, to improve Chinese margin requirement system, to establish special governmental regulatory agency, to grant more power to the future transaction self-regulatory organizations, and to establish an oversee system participated by multiple parties.