A Study On The Legal Supervision System Of Stock Index Futures Market

The announcement of Shanghai-Shenzhen300Index Futures Contract by China Financial Futures Exchange Co., Ltd. on April16,2010indicates that the capital market in China has entered the age of financial derivatives. The introductions of stock index futures has put Chinese capital market through profound structural changes and thereby effectively meet the needs of diversified tools for risk avoidance and capital investment on the part of investors. However, the risks in stock index futures market must be given due attention by the supervision authority. It seems to be particularly important to prevent and relieve the risks in stock index futures market during such a phase when our capital market is undergoing booming and transforming development and is still in shortage of relevant experience as well as well a sound legal supervision system. Hence now it is of vital significance to further study and perfect the legal supervision system of stock index futures market so as to get rid of the lurking risks in the market, give full play to the functions of stock index futures derivatives and promote the steady development of capital market.Stock index futures based on stock price index futures is a financial transaction subject matter, which aims mainly to reduce or avoid the risk resulting from the volatility of stock market prices. As other financial derivative products, stock index futures may involve market risk, liquidity risk, legal risk, and so on. These risks have objective existence, expansion and diversity in the transaction process. Combined with the reality of China’s capital market development in China’s stock index futures market, there exist various risks the risk of the CSI300stock index, the City’s policies, the asymmetry of the stocks and stock index futures market, stock market levels, structural defects and the imperfectness of the listed company’s information disclosure mechanism. These major risks have their particular economic and legal reasons. Based on the detailed analysis of the legal system in the mature stock index futures markets such as that in the United States, Britain, Japan and Hong Kong, this paper summarizes its regulatory experience in the legal system, which lies in a relatively sound legal system, the establishment of three regulatory regimes, the emphasis on government intervention and on risk control. In the process of establishing and improving the legal system of China’s stock index futures market, it is necessary to fully learn the essence of the legal system of the mature stock index futures markets outside China based on China’s actual situation, to further improve the legal environment of China’s stock index futures markets, such as the improvement of relevant laws regulations, the introduction of the Exchange Act. In addition, the three regulatory regimes of China’s stock index futures markets should also be established and further improved to promote China Securities Regulatory Commission, China Financial Futures Exchange and Futures Industry Association’s to play a supervisory role more effectively.