Research On The Legal Question Of Financial Derivatives Transaction Close-out Netting

As an important term of the conditions of the agreement which is signed by the parties to financial derivatives transaction, financial derivatives transaction close-out netting system does well in helping the deal going smoothly, meanwhile, it also can make both parties to the transaction to avoid the legal risk in the transaction process and when the event of default occur, it can protect the rights or interests of the both parties in the transaction from damaging, and then solve the credit risk and the overall risk in financial derivatives transaction. But when it is playing a great function, it also inevitably has a huge irreconcilable conflict with the relevant legal system of China’s "enterprise bankruptcy law", In order to successfully introduce this system to the legal environment and make them compatible, we must perfect our legislation and make the rich connotation of the close-out netting can set down in China finally in the form of the legislation to solve the problems about validity and enforceability, and finally make close-out netting better serve Chinese financial derivative transaction practices from the economic and the legal level.This issue intends to start with the perspective of the financial derivatives transaction close-out netting:The first part giving the accurate definitions on financial derivatives, close-out netting and financial derivatives transaction close-out netting separately, and deeply analyze the legal nature, great significance of the close-out netting system and the essence of the differences between close-out netting and set-off.The second part from the view of the international regulations, analyze the financial derivatives transaction close-out netting legislation of the developed countries and the typical regions, and then, analyze the purpose of legislation, legislative idea which the financial derivatives transaction close-out netting uses and the methods of the close-out netting about effectively solving or avoiding the conflict between it and the system of bankruptcy law to succeed make the financial derivatives transaction close-out netting legislation can be referred for the construction of China’s system.The third part combining with the current situation of China’s financial derivatives transaction close-out netting, in order to protect the legitimate interests of both parties of financial derivative transaction and implement the effectiveness and the enforceability of close-out netting, and at the same time, in order to promote the consistent trend of china and international legislation, finally drawing the conclusion that china should perfect the legislation of the system of financial derivatives transaction close-out netting. Based on the rise in the level of economic development, the rapid development of financial derivatives, financial derivatives transaction increase and the existing laws, regulations and other concepts, It also deeply analyze the legislation details of China’s financial derivatives transaction close-out netting to provide the basis for Chinese future legislation.The final part according to this issue on China’s future financial derivative transaction close-out netting legislation, change the legislation idea of financial derivatives transaction close-out netting legislation and legislative principles and construct the ideas about financial derivatives transaction close-out netting, in this perspective, discussing how to establish the basic system, basic rules of net settlement legislation and how to realize the per formability and affectivity about the financial derivatives transaction close-out netting.