Analysis On Legal Remedy Of Financial Derivatives Transactions Under Extreme Risks

In the early morning of April 21,2020,the settlement price of the May WTI futures contract on the Chicago Mercantile Exchange closed negative for the first time in history,this lead to the "Crude Oil Treasure" products linked to the WTI futures contract in the domestic Bank of China suffered huge losses,some long investors also suffered huge losses.In the face of such huge losses,the investors,Bank of China,regulatory authorities,market analysts and others took actions to express their views and opinions respectively through various channels.Finally,the Bank of China reached a settlement with some investors,however,some investors still filed a lawsuit to the court by asking the Bank of China to compensate their losses.The uncertainty of the international economic and trade as well as geopolitical situation under the epidemic is likely to trigger market panic and extreme market trends.Should investors seek compensation from counterparties for the huge losses occurred when financial derivatives trades encounter extreme market risks? How to divide the liability if compensation can be claimed?This paper focuses on the legal remedy of financial derivatives transactions,takes the case of "Crude Oil Treasure" as the basic case.By comprehensively adopts the methods of case analysis,comparative analysis as well as interdisciplinary research,the author mainly analyses the opinions of various parties in the market during the "Crude Oil Treasure" incident,as well as the judicial proceedings involved in the "Crude Oil Treasure" incident.The author sorts out the main legal issues concerned in the handling of the "Crude Oil Treasure" incident,puts forward her own views on the event and analyzes the legitimacy and legality of the handling of financial derivatives transactions under extreme risks.Through the study of the handling of "Crude Oil Treasure" incident,the author finds the deficiencies of financial derivatives trading in legal regulation,litigation system,non-litigation relief,legal education and other aspects.According to the occurrence time of extreme risk,this paper puts forward some relevant suggestions,such as strengthening the construction of qualification access and protection regulation of trading subject,improving the judicial litigation relief system,unblocking the diversified path of legal relief,and cultivating the contract spirit of the whole society.The author also brings out her hopes that Chinese financial derivatives trading can get more comprehensive legal remedies in the case of extreme risk which can easily occurred or already occurred.The vision of a long-term healthy development of Chinese financial derivatives market also brings out.