A Study On Legal Issues Of Financial Derivatives Business

Over the past ten years, with the rapid development of financial derivativesmarket, the financial derivatives business has started to become an integral part ofthe financial market. How to balance the rights and obligations of the parties in thefinancial derivatives business and how to make better use of legal norms to solve thevarieties of problems appearing in the business, which is of great significance to ahealthy and orderly development of the entire financial derivatives market. That iswhy more and more countries have gradually paid attention to the study of legalissues related to the financial derivatives business.This dissertation is based on the relevant provisions of the Contract Law andmakes a separated study of three legal issues of the business as the mainline. And thedissertation analyses the specific constituent elements and legal regulations of thisthree issues from the theoretical point. It is not a long time that the business developsin China, and the related theoretical researches and legal norms are still in its infancy.Therefore, it is necessary to refer to theoretical results and legislative experiencefrom countries which have a developed market and a complete system. For thisreason, the author quoted a large number of foreign legislative outcomes in thedissertation, hoping to play a referenced role for other researchers in this area. Inaddition, the author enumerates many practical representative cases in thedissertation and analyses these cases together with the related theories, whichexpects to achieve the purpose that having a better demonstration of views.The dissertation includes four chapters:The first chapter analyses the legal nature of the financial derivatives business.This chapter is based on the point of view that the financial derivatives business is akind of private law contract. It demonstrates that the entire business is alwaysconstrained by the basic principles of contract law and that the discussion should beexpanded under a complete set of logic in the contract. First, this chapterrecapitulates the connotation of the financial derivatives and introduces different concepts and types of the derivatives. Second again, this chapter analyses theeligibility for the subject of the financial derivatives business and elaborates on thestandards of entering the market for each party. Last, this chapter analyses the legalattribute of the business’s object. And the legal attribute is considered as thecornerstone for establishing various corresponding legal norms.The second chapter mainly analyses the performance on standard terms in thefinancial derivatives business. In the business, although the emergence of standardterms adapts to the massive, professional and standardized trend of economicactivities, it is facing a departure from the freedom and fair of contract at the sametime. Therefore, the emergence of standard terms bright lots of legal risks for thefinancial derivatives business. To start with, this chapter discusses several specialperformances of standard terms in the financial derivatives business. Secondly, thischapter elaborates several basic principles for identifying the effectiveness ofstandard terms in the financial derivatives business. Thus it will truly achieve thepurpose of protecting useful standard terms and regulating unreasonable terms.The third chapter mainly probes into the contracting fault liability in thefinancial derivatives business. First, this chapter analyses the components of thecontracting negligence responsibility in the financial derivatives business, and itparticularly stressed the obligation to disclose. Secondly, this chapter presents thecompensation rules. And since this problem doesn’t show too much particularity, thischapter illustrates the problem in accordance with the general situation of theContract Law.The fourth part mainly analyses the civil liability for the fraudulent conduct inthe financial derivatives business. First, this chapter analyses the components of thefraudulent conduct in the financial derivatives business, and it highlights a fewspecific and representative fraudulent acts. In the next place, this chapter expoundsthat how the deceiver to bear the civil liability in order to protect the legitimateinterests of the damaged parties and to promote the stable and orderly developmentof the whole market. Lastly, this chapter discuses various countries’ legal regulationsto the fraudulent conduct in the business and expresses a hope of improving relevantlaws and regulations in China。 Study on legal issues of financial derivatives business and improve the relevantlegal norms. That would be propitious to create legal-based conditions for thefinancial derivatives business, establish a fair and competitive market environmentand improve the business system.