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Study Of The Regulatory Law Of The International Financial Derivative Transactions

Posted on:2008-01-26Degree:MasterType:Thesis
Country:ChinaCandidate:F M SunFull Text:PDF
GTID:2206360212987533Subject:International Economic Law
Abstract/Summary:PDF Full Text Request
As the development of global economics and international finance, financial derivatives have been most energetic and effective financial product. Financial derivatives trade is based on traditional financial derivatives trade, but it is more competitive. A good financial derivatives trade becomes the signal of maturity of a financial derivatives trade market of a country. Since 1990s, both developed countries and countries which have new markets, encourage to develop their financial derivatives trade market to increase their competitive ability and get important position in international financial market. So many countries try develop their derivatives trade market because not only it is trend of financial development but also its advantages in decreasing cost of trade,stabilizing financial market, encouraging development of economics. By 2005, the notional size of the derivatives market had grown to over five times the total capitalization of all exchange-traded equity and debt in the world.Financial derivatives trade has its advantages; however, it also has some legal risks as financial derivatives products contain so many types based on different financial assets and basic financial trade, and are related to so many law departments that many countries do not have effective measures on regulation of it. According to statistics, half of losses occurred in financial derivatives trade is resulted from legal risks. Bankruptcy of Barings Bank and collapse of Enron have some connections with financial derivatives trade.In China, business of financial derivatives has been done from March 1997 when China Bank started RMB forward transactions. As more and more financial business appears, more and more Chinese corporations, especially financial organizations, have been becoming interested in transactions of financial derivatives. At the same time, as Chinese economics has more and more connections with international financial market, financial market abroad is developing financial derivatives products connected Chinese financial market and have created a lot of financial derivatives products which are connected with Chinese market. These financial derivatives haveeffected our financial market in some sense and bring us crisis of losing right of fixing price.According to the Protocol on the accession of the Peoples Republic of China, Chinese finance market has been completely open to the world since November 2006.However,to meet challenges and take opportunities, relevant laws and regulations are really needed in China. Now Chinese principal legal regulations are contract with international practices, such as contract law,exchange,collateral,bankruptcy,securities, etc. Therefore how to regulate the transactions of financial derivatives in China becomes task of top priority.According to current situation of our financial derivatives trade, author hopes to conclude and summarize successful lessons of western countries and international organizations and give some suggestions to legislation work of our country.
Keywords/Search Tags:financial derivatives trade, legal risk on financial derivatives trade, method of regulation on the financial derivatives trade
PDF Full Text Request
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