Study On The Supervision System Of OTC Commodity Derivatives

The particularity of the supervision on over-the-counter(OTC)commodity derivatives originates from the particularity of the transaction nature.Based on bulk commodities as their underlying assets,when settled in physical delivery,the nature of transaction is different from that of spread trading of OTC financial derivatives.From the perspective of market nature,the OTC commodity derivatives trading and the market can be dichotomized into transactions that use physical objects for delivery purposes are closer to the spot market,and transactions that are settled only by spreads are more in line with the financial market.From the perspective of transaction form,if forward transactions are not abused as disguised futures transactions,at least one market participant shall conduct the transaction with the purpose of delivery in kind;However,this is not the case for options and swap transactions,both parties shall conduct the transaction with spread transaction.Therefore,the OTC derivatives trading has the generality of OTC derivatives trading,which is similar to the OTC financial derivatives trading,but also has its own characteristics.This Paper is divided into four parts to study the generality and particularity of OTC Commodity derivatives trading based on the OTC derivatives regulatory reform advocated by the G20 and the actual situation of the OTC Commodity derivatives market and regulation in China.Chapter 1 introduces the basic information of China's OTC commodity derivatives and the supervision thereof,including the current development status of the OTC commodity derivatives market and the market distribution thereof.It compares the OTC commodity derivatives regulation with the OTC financial derivatives regulation,futures market regulation,and the commodity spot market regulation.We then points out the existing problems in current OTC commodity derivatives supervision.This Chapter aims to describe the particularities of OTC commodity derivatives trading and the supervision thereof,sort out the existing regulatory provisions of China and explain the problems existing in the supervision.Chapter 2 discusses the development and supervision of China's OTC commodity derivatives market.We try to distinguish the nature of different OTC commodity derivatives trading markets and divide the market according to whether it is similar to a commodity spot market or to a financial market,and differentiates the forms of forward transactions,so as to establish a regulation that meets the market development needs.At the same time,since the OTC derivatives market is still in an early stage in our country,This Paper also suggest further recommendations to solve problems in current supervision.Chapter 3 first studies the OTC derivatives regulatory model of both the United States and the European Union,and analysis the difference between the monistic system and the dual system.This chapter focuses on the reform of OTC derivatives regulation in the United States and the European Union.That is,the compulsory liquidation and the transaction reporting system.We analyze the particularity of OTC derivatives regulation and summarize the experience of the regulatory reform in Europe and the United States.Chapter 4 analyzes the development of the OTC commodity derivatives market as well as the main risk characteristics of different OTC commodity derivatives markets.Appropriate regulatory systems shall be established based on the perspective of risk management,and it is believed that the compulsory liquidation and the transaction reporting may be applied differently to the OTC commodity derivatives trading at different market.We focus on the particularity of the application of these two regulations to the forward transactions in bulk commodity electronic trading market.The requirements for compulsory liquidation and transaction reporting are lower than those for the transactions of OTC financial derivatives or other OTC commodity derivatives.