On China's Covered Warrants Legal System

Review the development of warrants in China's security market, it has passed a path which full of bumps and unexpected. In overseas advanced warrants markets, when covered warrant was put into the market, it was not only quickly accepted by stock markets and investors, but also to be the main kind of the financial products. In view of the present situation of China's warrants markets, bring in the covered warrant is the only way to save our security market. However, the market and investors must face many kinds of risks when we bring in the covered warrant, and we need to research the match legal systems to control the risks. By thinking of the existing problem of China's warrant legal system, and investigated the overseas advanced warrants legal system, the author considered that we need to establish a covered warrant legal system which could perfect the surrounding of the security market, in addition, some specific system also need to improve and perfect.Firstly, the thesis researches the principal theory of covered warrant and risks. To find the reason of the warrant market that is being marginalization, the author considered that we must bring the covered warrant into our security market. In order to control the risks effectively, we should establish a useful legal system.Secondly, the thesis reviews and analyses the situation and problem of our warrant legal system. The author point out that our warrant legal system not only lack of framework, but also lack of concrete system designs. Through the research and the comparison overseas advanced warrants legal system, the author considered that we could select an overall risk prevention model which was being in Taiwan. The model would control the risks in every part of trading link.In the end, the author researches to structure and perfect our covered warrant legal system. The author considered that we should distinguish to structure subscription warrant legal framework and covered warrant legal framework. When we structured a covered warrant legal framework, we further need to improve perfective and complement of our covered warrant trading legal system. The perfect content includes that strictly issuer access rules, diversification of underlying securities, listing approval system, the creation of the system, market maker rules, information disclosure system, etc.