Research On Investor Protection Legal Issues In Complex Financial Derivatives Transactions

Complex derivatives are important financial tools used by financial markets participants for the purpose of risk management and wealth increasement.Since the rise of the complex derivatives market in 1970 s it has experienced a explosive growth,derivatives,due to the characteristics such as flexibility,personalization,high-leverage and light regulation of such transactions.However,those characteristics bring both superiorities and defects,decided that complex derivatives are born with high profits and high risks;high degree of flexibility,personalized design,high leverage.However,its advantages also determines its potential high risk: the alienation of financial derivatives,complex special risks,the complexity of pricing mechanism,the credit rating of true.And the characteristic is also evident in the dispute over a series of huge losses,thus become the financial derivatives trading in the important issues of investor protection.In view of the differences between complex financial derivatives and general business contract,the guaranty contract,it's more suitable to consider it as a particular type of financial contract.This is also the starting point of the system be perfected.In complex financial derivatives trading,the development of the principle of freedom of contract,the development of the protection of the weak as well as the social standard of economic law are the solid legal basis for investor protection.However,it is important to note that,in the complex financial derivatives transactions,"the buyer to be careful" principle and "the seller is responsible for" principle both are applicable.We Should not only realize the relativity of "the buyer to be careful" principle applies,and to correct positioning "seller is responsible for" principle.In this way,can we truly grasp the fundamental key of investor protection.Investors appropriate obligations is very important for market stability and the significance of investor protection.The United States,the European Union,Japan and other major countries and regions have formed their own characteristic systems.However,its institutional defects also gradually exposed a series of legal problems.For example: it deprived part of its investors' fair opportunities to participate in the trade,its particularities challenge the standard of "appropriateness",lack of specific rules,and a series of legal problems cause from system orientation deviation.In view of all the existing legal problems,we can improve the system of current investors appropriateness from philosophy level and system level.In the field of investor protection,financial institutions of information disclosure obligation is the core mechanism to correct the information asymmetry between financial institutions and investors.In complex financial derivatives transactions,information disclosure obligation is different from general information disclosure.Among them,as two primary obligations,the risk prompt and promote obligations are challenged.In the current information disclosure system,deviation of information disclosure system's concept,lack of disclosure motivation,lack of the actual effects,the degree of disclosure in doubt,and many other legal problems need to be solved.Thus,we can try to perfect the system from the four aspects: correct the concept of the system,build dynamic mechanism and attach great importance to the investor education,adopt differentiation of disclosure degree.The disputes in complex financial derivatives,the reasonable allocation of the burden of proof is very important for financial institutions and investors when they meet in court.It is the precondition to make sure that they can be treated fairly.However,due to the particularity of complex financial derivatives,investors face the plight of difficulties of proof.Therefore,appropriate increase financial institutions' burden of proof,reduce investors' burden of proof is necessary.Causality of onus probandi inversion,weakening investors to subjective fault of the burden of proof,to some extent,these two steps can safeguard the interests of investors.