On Legal Issues Of Chinese Corporate Risk Control Over Financial Derivatives

Financial derivatives (derivatives) are hedging instruments whose value depends on the values of underlying variables, such as commodities, interest rates, currency exchange rates, securities, or indices. Fatal defects have become evident since Chinese Corporate Derivatives Transaction Losses Event in2008and those defects needs legal analysis as a solution. The traditional research usually comes from the aspects of "Judges and Lawyers" and focuses on function of financial regulation with little attention paid to legal methodology private law and corporate reality. On the basis of the previous study, this thesis will make an attempt to discuss from a brand new view.The thesis is subdivided into six parts:Introduction, the first part, introduces the background, purposes, research methods and main points of this thesis. Chapter one, an overview of financial derivatives, starts with the statement of the economic and legal connotation of financial derivatives, which is followed by the analysis on motives for corporate usage of financial derivatives. At end of this part, risks of financial derivatives are introduced briefly. Chapter two presents existing problems and research myths in the issue of Chinese corporate risk control over derivatives from aspects of the contract management, corporate governance and financial regulation. Chapter three chooses the legal analysis as the research method of this thesis, which is followed by the analysis on the feasibility, two premises and three approaches to legal analysis of finance. Mechanism of Chinese corporate risk control over derivatives is discussed from aspects of the contract management, corporate governance and financial regulation in Chapter four. The last part combs throughout the whole dissertation and draws the conclusion. Issues unsolved in this thesis and those needed further study are point out.