The Research On The Cross-market Surveillance Of Stock Index Futures Market And The Stock Market

Stock and stock index futures cross-market surveillance system stems from the existence and development of stock market and stock index futures market. It is well-known that the stock index futures market was crushed by the American stock market instability in 1987, which was called "cascade effect" and also made people aware of the close association between risk of the stock index futures market and the risk of stock market. In 1988, the Brady group designated by the United States government not only presented a profound summary of the reasons for the stock market crash in "Brady Report",but also put forward a series of cross-market surveillance proposal for stocks and stock index futures, indicating that the cross-market surveillance system of stock index futures and stock market supervision was on the way. Based on "Brady Report", the stock index futures and stock markets in the United States, as well as other countries and regions, carried out cross-market surveillance measures, bringing about the financial market stability.Due to functions of the stock index futures derivatives with the stock price index as the subject, namely avoiding price risk, discovering price, and improving the efficiency of capital allocation, it is welcome among a large number of market investors. According to the purpose of transactions, these cross-market transactions can be divided into four types, namely cross-market hedging, cross-market risk management, cross-market arbitrage and cross-market speculation. Cross-market transactions may cause cross-market joint manipulation, insider risk, especially cross-market excessive speculation in China. Chinese risks in stock and stock index futures transaction are mainly caused by the correlation between stock index futures and stock markets; shortcomings and defects of Chinese stock and stock index futures market laws and regulations; imperfection of government surpervion and self-surpervion on Chinese stock market and stock index futures market. What’s more, Chinese anti-monopoly legal system, information disclosure system, cross-market stability mechanism and institutional investors internal risk control system need further improvement.In order to establish and perfect Chinese stock and stock index futures cross-market surveillance legal system, we must attach great importance to the market external supervision of the investors, strengththen the coordination of egislation, government supervision and self-discipline. As China’s capital market is facing a new market transition, market manipulation, insider trading and excessive speculation are common, so it is necessary to establish comprehensive cross-market anti-monopoly legal system, cross-market information disclosure supervision legal system and the mechanism of cross-market stability for stock and stock index futures market. Firstly, concerning cross-market information disclosure supervision legal system, although varieties in traditional cultures, law systems as well as the historical backgrounds and social realities factors in various countries and regions lead to some differences in goals of information disclosure supervision in foreign stock markets has, there is no lack of generality, which are designed to improve the transparency of the market, reduce and prevent the occurrence of insider trading and enhance investor willingness and confidence. On the basis of "three regulation" system in the United States and UK, we should set up cross-market information supervision departments by the CSRC, Exchange and Trade Association in Chinese stock market and stock index futures market, and cross-market information sharing mechanisms by departments of different supervision levels. At the same time, it is necessary to further improve the securities market information disclosure system: strengthen the disclosure of information of listed companies, improve the institutional investors information disclosure and strengthen the network information disclosure supervision. Secondly, as for cross-market stability mechanism, fuse mechanism of stock and stock index futures market is the core portion of the cross-market stability mechanism. Despite differences in specific stabilization mechanism provisions of different countries and regions, they ensure coordination and corresponding of the stability mechanism. Regarding the establishment and perfection of Chinese stock and stock index futures cross-market stabilization mechanism, we should give full consideration to the factors, such as the stock market pattern and its stock price index、the investors structure in stock markets the change of investment concept etc. should establish and follow a infrequent trigger, dynamic adjustment and easy operation market principles, and constantly improve the following three aspects, namely, establishing legislation on cross-market mechanism for circuit breaker; to strengthening collaborative cooperation led by the CSRC with government supervision; for the self surpervion, to strengthening the market a line surpervion role of Exchange.With the development of stock index futures financial derivatives market,institutional investors will become Chinese stock and stock index futures market in the cross-market main body. For the establishment of a sound internal risk control system of institutional investors, it should be systematic, dynamic and personal. Therefore, it is necessary to establish and perfect provisions of internal risk control systems, including the scientific risk management systems, smooth information sharing and risk reporting system and effective internal supervision system.