Research On The Legal Issues Concerning The Guarantee For Margin Trading In China

From a global perspective, margin trading is a basic credit transaction system. Combining with the traditional spot trading system, it can play a significant role in stabilizing and developing the securities market. China launched margin trading business formally in March, 2010; up to now,the trading volume has reached up to many trillions and the business has developed in a repaid and vigorous manner.In margin trading system, guarantee system is the core. Since the margin trading is characterized by credit transaction, it’s highly risky. Margin trading guarantee is an effective means of controlling the risk, which can ensure transaction safety and promote the healthy and stable development of securities market. However, the margin trading is still in its infancy in China and the legal provisions on guarantee system are far from complete, so it has encountered many problems in theory and practice. It’s essential to lay emphasis on studying the legal issues concerning the guarantee for margin trading to improve it and bring the function of risk control into full play. The research is carried out mainly in four parts.The first part provides a brief introduction to margin trading and its guarantee system. It mainly covers such basic contents as definition, characteristic, function, legal relation and legal nature, etc. The first part is essential for the paper.The second part probes into the legal issues concerning the guarantee system for margin trading in theory and practice. The conflicts between the method of guarantee construction and several Chinese basic laws are mainly analyzed and the problems of the guarantee system in practice are clarified.In the third part, the legislation in foreign representative countries is evaluated and analyzed pertinently in accordance with the legal issues concerning the guarantee for margin trading in China. Through comparative analysis, it’s aimed to absorb what is good and apply to China’s legislative practice.Finally, according to the analysis on the legal issues concerning the guarantee for margin trading in China and on the basis of learning from foreign experience, the suggestions on improving the guarantee system via functionalism are proposed in terms of the construction confusion in the guarantee for the margin trading in China; the specific solutions for the problemsof guarantee system in practice are advanced with a view to improving the guarantee system for the margin trading in China.