Financial Derivatives Otc Legal Regulation

Although the financial crisis in 2008 disclose the veil of our state-owned enterprises who undertook substantial loss on OTC derivatives transactions, total transaction volume of OTC derivatives market still witness rapid growth with the accelerated pace of international financial innovation. Therefore, our investors cannot give up participating in this international financial fight just due to the above mentioned fail. However, since our OTC derivatives market is far from mature up till now, derivatives transactions will definitely result in various legal issues under such incomplete legal and regulatory environment. Nevertheless, from the author’s personal perspective, there are two critical legal topics deserve our further research. One is how to self-exam the existing problems of Chinese legislation and supervision system that exposed during the financial crisis. And the other is how to establish and improve the legal and regulatory system of Chinese OTC derivatives market at the aim of building a moderately functional one. As an introduction to the subject of the thesis, the background information, the significance to study the derivatives, the structure and method of the research and the literatures in the global context, are provided in Introduction.Chapter One is to analyze the OTC derivatives market products and the legal essence of OTC derivatives transactions. Chapter Two is for self-examination the case that Chinese enterprises undergone substantial loss in OTC derivatives transactions during the financial crisis. Chapter Three is to raise the legal and supervisory requirements on Chinese OTC derivatives market at the post-financial crises era. The last Chapter is to explore the legal and regulatory path of the Chinese OTC derivatives market.Throughout this article, the authors lists the OTC derivatives transactions as the research keynote and then analyze the OTC derivatives market products and the legal essence of OTC derivatives transactions from the legal angle. By deep analysis on the case that our state-owned enterprises undertook substantial loss on OTC derivatives transactions during the financial crisis, pointing out the existing issues of Chinese OTC derivatives market, combining with the legation and practices of the western countries and the international industry associations during the development process of OTC transactions, the author attempt to explore the future directions and target for the establishment of our OTC derivatives market laws and regulation in the post-financial crises era, aiming to build a unique legal and regulatory system which is most appropriate for the sound development of our OTC financial market.