Legal System Design On China’s Bill Intermediary Under The Background Of Financial Innovation

In China’s growing financial and monetary markets, the bill market is an important part of closely linked between the money market and the real economy. In thirty years of the rapid development, the bill behavior increasingly complex and the bill intermediary agency increasingly diverse. As the intermediary agency of connecting the trading parts, the bill intermediary agencies enhance the activity of the bill market and meet the needs of the bill market transactions. But now, our existing bill intermediary agencies are the bill operating divisions within the banking system. And they are inefficient. At the same time, the non-bank bill intermediary agency is in the gray area owing to the vague legal system and the imperfect market risk control system. So it is difficult to be effective.In the context of financial innovation, this thesis analyzes the bill intermediary agency and its history to get the value of non-bank bill intermediary agency and its difference. Then based on two typical domestic bill intermediary agencies’ legal analyses, we find the lag of legal system and the weakness of risk control of the non-bank bill intermediary agency. After that, we learn advanced legal practice from Taiwan and some foreign bill markets about the bill intermediary agencies. At last, this thesis designs legal framework of the non-bank bill intermediary agency to innovate the legal system and the market risk control system. The full thesis is divided into an introduction, body and conclusion of three parts.The introduction is mainly on the background and significance of this thesis. It lists, summarizes and comments the literature research on the bill intermediary agency to indicate the direction of the research. It also describes the main methods used in this thesis and the frame of this thesis. At the same time, it introduces the main ideas and the shortcomings in this thesis.The body has four chapters, around thirty five thousands words.The first chapter researches the reality and theory of financial innovation and bill intermediary agency. The first section introduces the basic theory of financial innovation, including the theoretical connotation of financial innovation, as well as the requirements for financial intermediaries in the context of financial innovation. The second section describes the production and development process of bill intermediary agency in the context of financial innovation. The third section defines the legal concept of the non-bank bill intermediary agency, and extracts the differences between the non-bank bill intermediary agency and bank bill intermediary agency to find its value.The second chapter legal analyzes our bill intermediary agency. This chapter is an important basis for this thesis, and enhances the understanding of the non-bank bill intermediary agency by two typical examples. The first section legal defines our bill intermediary agency and classifies by its classification. And then we summarize its features and find the situation of uneven development. The second section analyzes two typical bill intermediary agencies using the method of empirical analysis: bill sales department of Commercial Bank of China and Purang Financial Services Ltd. And then this thesis compares the differences about development and operations management. The third section summarizes the problems of non-bank bill intermediary agency. The problems include the lag of legal system, lack of access mechanism, the vacuum of regulatory mechanisms and lack of industry association. The problems also include the inadequate risk control system, low degree of risk control, lack of social credit system and information system.The third chapter is a study of bill intermediary agency in Taiwan and abroad, and then summarizes the experience. The first section introduces the operational status and management of bills finance company in Taiwan, Japan’s short-owned company, British discount house and US investment bank subsidiaries and bank holding company subsidiaries. The second section gets the experience of the bill intermediary agency in these areas. The experience includes valued by the government, independent and specialization of bill intermediary agency, bill species diversity and bill mature market, and having complete business credit system.The fourth chapter is making legal frame design on non-bank bill intermediary agency. This chapter is an important part of this thesis, and the outcome of this thesis. The first section specifies the principle that when the legal regulation of non-bank bill intermediary agency we should adhere to. The principles include bills without cause, improving market efficiency and prudential supervision. The second section, third section and fourth section design the legal framework of non-bank bill intermediary agency. The second section is to clarify its legal position, to include to the legal system and to select the development model of bill intermediary agency. The third section designs the basic legal system: regulatory mechanism, access system and exit mechanism. The fourth section is to make adjustments about the market risk control system to improve risk prevention and control capabilities of non-bank bill intermediary agency. It includes improving risk control legal system, construction of internal risk control system, to accelerate social credit system and a unified bill information system construction.Through the above progressive and more comprehensive type of research, this thesis argues that we should timely legal define to the non-bank bill intermediary agency, affirm its value and recognize the legal constraints. Then improve and refine the basis of the legal system and market risk control system in our bill market. Only in this way our financial innovation intermediaries can play a strong driving force for financial markets and enhance the vitality of China’s bill market.