The Taiwan Margin Guarantee Mechanism And Its Revelation Of The Legislation On The Mainland

Securities margin trading, an important part of securities trading in mature capitalmarket, started the implementation of the pilot in stock markets of Shanghai andShenzhen in May,31,2013. The introduction of securities margin trading bringsinfinite vitality to China’s security market and at the same time causes a variety ofproblems, one of which is the major defect of the margin guarantee mechanism,wanting to be properly resolved.China’s Securities Regulatory Commission promulgated a series of regulationswhich take margin trading funds and securities qualitative as collateral for the trustproperty, but this is far from the nature of the trust theory. Throughout China’ssecurity interest system, we can not identify a security relationship which can matchwith the guarantee mechanism in the margin trading.Through the study of Taiwan’s margin guarantee mechanism, we find thatTaiwan’s solution is by adopting “transferring guarantee” and establishing a moremature regulatory system and judicial precedents to guide practice, which is veryworth learning from.After horizontal comparison and thorough analyze, the paper suggests a set ofsolutions: deleting the trust regulations from laws; establishing security transfersystem as the guarantee regulations in securities margin trading; enactingTransferring Guarantee Special Laws to coordinate with the current guaranteesystem.