Research On Regulatory Issues After Treasury Futures Restart

Treasury futures as a financial derivative products has high-yield, high-riskcharacteristics. Vicious violations due to the high risk derivative varieties triggeredendless history, such as the famous "Bahrain incident" and domestic "327" on theinternational bond futures events are triggered turbulent financial markets. Inparticular, known as "China’s Bahrain event" and "327" storm, not only led to thefailure of the pilot bond futures, but also makes new financial derivative products hasnot been approved by regulators launched, resulting in the stagnation of developmentof financial derivatives. How to carry out effective supervision of financial derivativeproducts has been a problem in theory and practical operation of community.September6,2013, after a lapse of eighteen years, bond futures officially listedin China Financial Futures Exchange. However, in the "327" event in bond futures,the main aspects of the transaction, a few institutional investors conspired tomanipulate the market, internal control mechanisms unsound internal supervisionproblems caused confusion in the market. External regulation, the Ministry of Finance,the Commission, the Exchange and other regulatory authorities is not clear division ofresponsibilities, policy implementation is not standardized, trading system designflaws and legislation lags behind other external supervision issues fueling the spreadof market speculation, which detonated Treasury futures market crisis. Stagnationeighteen-year-old re-bond futures market, since its launch less than a year, inevitablylead to public trading on the bond futures on the subject of internal supervision andexternal supervision regulatory authorities can put in place the regulatory concerns. Itis based on doubt, inspired himself from the transactions subject of internal controland regulatory supervision of the two main lines of external regulation of bond futureswere studied after the restart.In this paper, COSO internal control theory and financial regulation theory,theoretically analyzed: internal regulation, financial institutions should be based onthe theory of the five elements of COSO internal control to build internal control system; external regulation, regulators should regulatory and supervisory functionsbased on target to build with Chinese characteristics, external regulation mode.Context of this study are as follows: First, the "327" incident as a case Treasuryfutures, the circumstances surrounding the incident for a detailed and meticulouscombing. Then in-depth analysis and reveal the "327" incident bond futures on theinternal supervision and external supervision of the many problems. Throughdomestic and international regulatory experience, including external reference, try tobuild a more comprehensive manner the internal control system and the country’sexternal financial institutions regulatory model.