A Study On Legal Regulation Of Forex Margin Trading In China

Foreign Exchange Margin Trading has became an important financial product asone of financial derivatives. In Western developed countries, foreign exchange margintrading is the significant parts of financial markets with thorough legal regulationsystems and supervision measures, rights and interests of investors’ can be wellprotected.But in China, foreign exchange margin trading is still illegal because ofmany reasons.Without legal regulation systems and supervision measures, rights andinterests of investors’ cannot be protected, Chinese foreign exchange margin tradingalways in a blind and chaotic state of development.Although domestic relevant departments jointly or individually prohibitedforeign exchange margin trading, it not disappeared,and exist and develop in a blindand chaotic state. The fundamental reason is that the real demand for foreignexchange margin trading in China. As lacking of innovation at domestic financialproducts and limited financial product&channels, also owing to deficient oreignexchange financial product and requirement of development and improvement offinancial market, cause the necessity to launch domestic foreign exchange margintrading business. Therefore, it is necessary for the legislation of foreign exchangemargin trading to regulate and guide the existing foreign exchange margin tradingindustry. On the one hand it can make up for the blank of domestic financiallegislation,on the other hand it also can guide the development of our country foreignexchange margin trading on regulating and healthy way, and then make it to promoteChinese economy development. In recent years Chinese financial industry developedwith remarkable achievements and attained certain primary accumulations, all of thesemake considerable possibility to develop Chinese domestic foreign exchange margintrading.The first chapter is the abroad practice of foreign exchange margin trading. Inthis chapter, a summary on the foreign exchange margin trading was made firstly, andthen presented the development and characteristics of foreign exchange margintrading. Secondly, the article researched and analyzed the practice of foreign exchangemargin trading, and the different supervision system about foreign exchange margintrading of American, Britain and Germany were expounded and indirect compared,and form the beneficial reference for the establishment of Chinese foreign exchangemargin trading supervision system.The second chapter is the problem of foreign exchange margin trading in China. This chapter studied and analyzed the currentsituation of Chinese foreign exchange margin trading，discussed the problem ofChinese foreign exchange margin trading in detail including lack of legislation,absence of supervision, short of investor protection mechanism, as well as thelegitimacy for overseas offshore companies carry out foreign exchange marginbusiness in China. The third chapter is the necessity and feasibility on development offoreign exchange margin trading in China. This chapter studied the necessity andfeasibility to develop Chinese foreign exchange margin trading, discussed thenecessity of developing Chinese foreign exchange margin trading from aspects of lawand economy. also discussed the feasibility to develop Chinese foreign exchangemargin trading, elaborate and discussed the necessity and feasibility to establish legalregulation system of foreign exchange margin trading in China indirectly. The fourthchapter is the path to build Chinese foreign exchange margin trading legal regulation.It’s the emphasis of this article,and it studied and analyzed the path of constructforeign exchange margin trading legal regulation in China,including regulate currentmarkets by making laws and regulations, build perfect supervision system, establishthe investor rights and interests protection mechanism, and set up internationalsupervision cooperation mechanism of financial derivatives..And put forward thebasic thought that relevant regulations can be formulated by the state council at initialstage and scope the foreign exchange margin trading into it and build the legal statusand clear, scientific and reasonable market access of foreign exchange margintrading.As for supervision, it can be supervised by Securities RegulatoryCommission.The last is the conclusion of this article, and the study of this paper arereviewed.The aim of this paper is looking forward to prepare for the development ofChinese foreign exchange margin trading on legal regulation, that will make Chineseforeign exchange margin trading develop well and healthy, and play a boosting role onthe economy development of China.