Research On The Guarantee System Of Margin Trading

Margin trading system is exotic in China, and it comes out without abundant theoretical arguments. After decades of years of practice, margin trading in China is constantly developing, although it has experienced twists and turns, margin trading system is also constantly improving. As the basic problem, the guarantee of margin trading has aroused the attention of the securities regulatory authorities, and relevant departments have also designed a set of systems to protect the creditor’s rights of securities companies. Margin trading is essentially a civil and commercial activity and it reflects many civil legal relations, so securities companies and investors trade on an equal basis. Unfortunately, the current research and understanding about margin trading are confined in the national regulation and the economic and financial field, and it is rarely involved in the field of civil and commercial laws. Therefore, this paper attempts to make a relatively systematic combing about the guarantee system of margin trading in the framework of civil and commercial legal. At the same time, this paper attempts to sort out the chaotic guarantee system of margin trading in China through the analysis about the nature of it. This work is able to provide support for the improvement of the guarantee system of margin trading in theory, and it is undoubtedly meaningful in defining the rights and obligations of all the parties involved in the margin trading and guiding the margin trading to run smoothly in practice.This paper is divided into five parts expect the introduction and conclusion:The first part is the overview about margin trading and its guarantee system. It introduces the concept, value and potential risk of margin trading, and analyses the concept and value of guarantee of margin trading, as the foreshadowing of the discussion in depth later.The second part is about the regulatory framework of civil and commercial laws of the guarantee system of margin trading. It analyses the regulatory framework of contract law, trust law and guarantee law of the guarantee system of margin trading, and analyses also the current guarantee system of margin trading in China.The third part is the empirical study on the foreign guarantee system of margin trading. In this part, the author launches a legal analysis on the guarantee system of margin trading in U.S., Japan and Taiwan of China whose systems of margin trading are more mature than China, and summarizes some experience of it for reference.The fourth part is the assessment about the current guarantee system of margin trading in China. First, the author demonstrates the nature of the guarantee of margin trading is alienation guarantee. Then, while a full recognition on the design of guarantee system of margin trading in China, the author also finds some problems about the guarantee system of margin trading in China, after the analysis about the practice problems and systematic defects of the guarantee system and the impact to the guarantee relationship aroused by the trust mechanism.The fifth part is the advices to improve the guarantee system of margin trading in China. In this part, the author puts forward his ideas about the absence of alienation guarantee, the coordination between the guarantee of margin trading and the trust mechanism, the implementation of the debt as the guarantee of margin trading and the improvement of the bond system of margin trading, in order to improve the guarantee system of margin trading.