Research On Legal Issues Of Bill Pledge Financing

As marketable securities,the rights carried on the face of the instrument have value as security,and the pledge of the instrument has become an express form of pledge under the law.The appearance of security rights and the nature of commercial operation make the pledge of bills applicable to both guarantee rules and negotiable instruments rules.In commercial activities,the need of SMEs for capital circulation has led to the evolution of the financing function as the dominant function of bill.Pledge of bills has also become a new means of financing.In the process of the validity of the pledge of bills,although the determination of the elements of the validity of the pledge of bills differs in civil and commercial legal norms,jurisprudence and judicial practice,according to the legal interpretation,jurisprudence analysis and the determination of the nature of the act,the endorsement of the pledge should be taken as an element of the validity.In view of particularity of negotiable instruments rules,the necessity of pledge endorsement is also reflected in the pledge of electronic bills that lack the act of delivery.In addition to the issue of the elements of the validity,the high negotiability of bills is hindered by the " true relationship of transaction " stipulated in the Negotiable Instruments Law of China due to the legislative background,and it is necessary to break the " true relationship of transaction " rule of bills,both from the perspective of practical needs and jurisprudence.In the process of realizing the bills pledge financing,there are obstacles to the realization of pledge contracts and innovative model of financing.The pledge contract without the pledge endorsement is realized in judicial practice by using the creditor’s subrogation right,which is suspected of overstepping the boundary of the civil law.This "parallel system" of guarantee rules and negotiable instruments rules is also internally contradictory in theory.The innovation of financing models has led to the discussion of the bill income right and the Internet bill platform,and the new models have improved the efficiency of financing while accompanied by the risk of realization of rights that cannot be ignored.The solution of the above-mentioned problems depends on the improvement of the regulation of negotiable instruments.Civil regulations and commercial regulations should be coordinated with each other,and guarantee rules and negotiable instruments rules need to take a unified stand on the issue of bill pledge and each has its own function,reflecting the respect of civil regulations for commercial rules.The adjustment of the regulation of negotiable instruments also needs to find a balance between efficiency and security,and the scope of application of the Negotiable Instruments Law of China for true relationship of transaction should be narrowed down by introducing financing bills to ease the pressure of financing,while putting an end to arbitrage and criminal acts on the grounds of innovation in bill pledge financing.Administrative and judicial supervision of pledge financing keeps prudent and moderate,to create a healthy environment for bill pledge financing.