On Pledge Of Finance Products In Commercial Banks

With the rapid development of China's market economy, the financial industry is booming, the innovation situation of finance products is unprecedented. From 2004, finance products in commercial banks began to enter the investment horizons of Chinese ordinary people, after a steady development process, now have entered a prosperous stage and become an important area of finance products innovation. Especially in the downturn stage of China stock market, finance products get a good opportunity to develop rapidly. Contrast the stock market in turmoil constantly, finance products in commercial banks have been stable, low-risk and high-yielding, so its market continues to expand, its categories are increasingly rich, and the quantity of customers buying it is in an explosive growth. So far, finance products in commercial banks have become a major public investment in China, ranking first in the finance market.When finance products in commercial banks are in a high speed development in China, however, its pledge business is presented on the legal gaps, which undoubtedly hinders its further development of pluralism, while its financing function cannot be fully realized. Thus, in order to enhance the liquidity of customers' funds, in practice, there have been already many commercial banks beginning operating the business of finance products pledge, such as China Everbright Bank, China Merchants Bank, Shanghai Pudong Development Bank, and China Minsheng Banking. But the problem is that Article 223 of Property Law specifically enumerated only six kinds can be the subject of pledge rights, and now there is no relevant laws or administrative regulations to specify pledge of finance products in commercial banks. Then according to principle of legal prescription of real right, as in this case of law does not specify, and finance products cannot be used as collateral. Therefore, the author will briefly introduce backgrounds and practical cases of pledge of finance products in commercial banks in this article, and analyze the legal barriers to it within the existing legal framework, and then propose some relevant ways to improve.In addition to introduction and conclusion, this paper is divided into three parts.Part I: General Issues about Pledge of Finance Products in Commercial Banks. At the beginning introduced what finance products in commercial banks are, explained its three types that guaranteed determinate profit finance products, guaranteed floating profit finance products and non-guaranteed floating profit finance products, and analyzed its nature features. Then a further transition to how pledge of finance products in commercial banks works, what conditions need to meet before commercial banks can conduct this business, and how necessary it is to carry out.Part II: Judicial Determinations and Legal Obstacles of Pledge of Finance Products in Commercial Banks. Due to lack of legal basis, there are a lot of controversies on the effect of finance products pledge, so after litigations, there has been kinds of judgments in judicial practice. This part lists two cases of opposite judgments, analyzes the causes of the differences, and thus summarizes the legal obstacles of pledge of finance products in commercial banks in judicial practice.Part III: Discussions about Legal Ways to Improve Pledge of Finance Products in Commercial Banks. Because in the current legal environment, commercial banks meet legal difficulties in the development of finance products pledge, so the ways most selected in judicial practice is to analogy apply other categories of pledge of rights, such as accounts receivable pledge or deposit receipt pledge. This part will compare finance products pledge with the former two pledges respectively, as well as discuss the feasibilities in analogy applications of both. At the same time, considering analogy applications of the regulations about accounts receivable pledge and deposit receipt pledge is just a temporary measure in the current after all, and finance products are different from accounts receivable and deposit receipt in characteristics, therefore pledge of finance products in commercial banks should be clearly incorporated into the framework of law. In contact with the legal obstacles of pledge of finance products in commercial banks in the second part, there are some advices to construct its legal system in the final.