Legal Research On The Circulation System Of Underlying Securities In Stock Counter-purchase

Legislation design on circulation system of underlying securities related to thesafety and efficiency of stock counter-purchase. The other auxiliary systems in therepo are closely linked with circulation system. From the legislative principle of view,the circulation system must be fulfilled the following requirements: adapt tohigher-level law, balance the interests between two sides and ensure the safety andefficiency of transactions.Chinese Repo Market includes two types of trade variety: treasury bonds outright repo, the hypothecating type buy-back. With the introduction of stock lendingand borrowing, the conflict between the guarantee mechanism of repo trading and theexisting security laws makes it hard to reach an agreement in how to construct aguarantee mechanism of repo trading. The purpose of this paper is to study the tradingstructure of other repo trading, to clarify the conflict of guarantee mechanism with theexisting security laws, and to construct a guarantee mechanism which can meet thedemand for repo trading.The first chapter is a summary on counter-purchase, and introduces the conceptand characteristics of different type of repos. In the second chapter the author usesmethod of law and economics to analyze the current securities counter-purchase(including treasury bonds out right repo, the hypothecating type buy-back). In the third chapter explain the Circulation System of Underlying Securities inStock Counter-purchase combines with the existing system.The fourth chapter researches the problems of Stock-Repo and explores theircauses.