Research On The Supervision System Of Electronic Bulk Stock Trading Market In China

The electronic bulk stock trading market in China has been developing rapidly in recent years. The data shows that, by the end of 2015, there are 1019 electron ic bulk stock trading markets in China. The tr ading commodities cover more th an 20 industries and value about 30 trillion yuan. Ho wever, due to the lack of supervision, many serious crisis have broken out in the market during the rapid developm ent, which becomes a huge threat to the financial security and social stability. To improve the situation, the targeted regulation of this market leaded by the State Council began in 2011. After that, the illegal activities decreased but the long-term supervision system hasn’t formed yet. In order to cont rol the risk, protect the investors and guide the market to develop healthily and orderly, better supervision system must be established. By introducing the overview of the electronic bulk stock trading m arket in China, analyzing the m ain modes of transaction, dissect ing the risks inherent and status quo of regulation, this paper aim s to propose suggestions to improve the supervision system of the electronic bulk stock trading market in China.This paper is divided into three part s: the preface, the body and the conclusion. The main content of the thesis includes four parts:The first part is an outline of the electr onic bulk stock trading m arket. Firstly, it analyses the concept of the m arket and indicates its four characteristics: the object of the transaction is bulk stock, the means of the transaction is electronic, the market is a corporation and the transaction is OTC. Secondly, it describes the form ation, development and status quo of the m arket. Lastly, it concludes the three m ain modes of transaction in the m arket: the listed trading, the bidding and the trading with deferred settlement.The second part concludes the risks whic h may break out in the electronic bulk stock trading market, such as unclear le gitimacy, illegal fund-raising, manipulation and fraud, the poor m anagement of market members. At the sam e time, it chooses several typical events and cases as illustrations.The third part describes the practice and status quo of the electronic bulk stock trading market. Firstly, it introduces the supervision progress and for ms regulatory rules in the order of time. Secondly, it points out three disadvantages of the current supervision practice: the fuzzy orientation of the market, the local protection problem and the low effectiveness of the rules, notes that the cu rrent supervision system can not guide and regulate the market continuously.The fourth part focuses on the establishm ent of the supervision system of the electronic bulk stock trading m arket. At first, it proposes a new supervision opinion on the market and solves the covert futures problem. The thesis holds the opinion that the reason of the appearance of covert futures is that the missing of approval system for establishing exchanges in China. It’ s better to lead the m arket to operate legally than to shut down the m arket arbitrarily. From the perspective of economy development and the reality of supervision, the thesis gives the opinion that the electronic bulk stock trading m arket should be oriented as a special OTC derivatives market. Besides,it points out that the arguing issue in the supervision of covert futures is the discrim ination between futures and forwa rds. By introducing the practice of CFTC about the discrimination between futures and forwards, the thesis points out that there aren’t fundamental differences between futures and forwards. The distinguishing standards are made for protection of the public inve stors and financial security. Moreover, by introducing the construction of multi-tiered derivatives market of U.S., it suggests that the range of commodities and investors should be added to the the distinguishing standards between futures and forwards, apart f rom standard contract, centralized trading and the allowance of offsetting. Secondly, it proposes the suggestions that we should allocate th e power and responsib ility of financial supervision between central authority a nd local government properly and set up the restrictions for developing the electronic bulk stock m arket, such as determining qualified commodities and investors.