Study On The Forced Liquidation Rules Of Margin Trading

Margin trading has been lifted, but its hidden risks have not been ignored by legislators. Guarantees and forced liquidation rules are important rules for controling the credit risks of trading. Guarantee is the basis of forced liquidation.Valid and effective guarantee is the premise of forced liquidation.Forced liquidation rules is the disposition rules of collateral of margin trading in essence. The value of the forced liquidation rules of margin trading should be targeted for protecting the secured claim realize smoothly ,and protecting the legitimate rights and interests of investors at the same time. The entity requirements of forced liquidation, including margin call failure and due debt repay failure, and margin call failure is the focus of this analysis. It is more appropriate for china to give the power of determining the margin minimum maintain guarantee proportion to the stock,but it is also necessary to monitor this power. It is also appropriate for china to insure a higher margin minimum maintain guarantee proportion now,when the financing securities become more mature,this proportion can be ruduced to a lower level. The collateral of margin trading include cash and securities in china,the valuation methods of collateral adopts the valuations of market.Margin call should be clear it's manner, intensity and duration. The main program of the forced liquidation rules,include the risk early-warning mechanism which waring the risk of forced liquidation,the margin call procedures of the broker when customers maintain ratio falls below the minimum guaranteed proportion,and the broker's forced liquidation procedures at the last. We should establish the risk early-warning mechanism of margin trading which include the warning indicators,the early-warning monitoring mode and the early warning approach. In the forced liquidation rules of margin trading,the specific settings of the the broker's margin call obligations will directly reflect the efforts in protecting the egitimate rights and interests of investors.The specific content of the the broker's margin call obligations include the manner,duration,content of the margin call and the situation which deemed to have noticed.The content of margin call of the forced liquidation rules need to be more specific. The implementation procedure is the necessary and important procedure in the forced liquidation rules. The main issues involved in the the forced liquidation implementation procedure, including the start conditions of liquidation ,the instructions issued of liquidation , the liquidation order, the strength of liquidation and the termination conditions of liquidation . In china,there are almost self-regulations without enforceable legislation norms about the implementation procedure of the forced liquidation,It is not proper to constrain this all by agreement. Relevant mandatory provisions should be included in the rules of the forced liquidation, on the design of peremptory norms, the requirements can be achieved in principle. The legal consequences of forced liquidation is not only the indispensable part of the forced liquidation rules in logic ,but also the strong basis for disputes which caused by the forced liquidation in the margin trading.The main content of the legal consequences of forced liquidation include the consequences of civil law and related administrative law and criminal law.Only specific, clear civil law consequences, administrative legal consequences and appropriate criminal legislation can ensure the margin trading activities carried out smoothly,and can reduce the actual occurrence of related disputes and the costs required to resolve the disputes ,and also can further protect the margin trading develop smoothly in China.This paper focuses on classification of the civil law consequences of the forced liquidation,including the kind of compliance liquidation ,defective liquidation and delay liquidation...