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Analysis on the legal system of compulsory position closingclosing positions in futures trading

Author: WuJia From: www.yourpaper.net Posted: 2010-06-01 19:56:55 Read:
Keywords:   the compulsory position closingclosing positions; guarantee obligations
Abstract: the compulsory position closingclosing positions in futures trading law system of has been controversial, the author from the legal nature of futures transaction for the sale of collateral, with a brand-new angle of the mandatory liquidation system is analyzed, the forced liquidation is the futures exchange as well as the Futures Company's obligations in this view.
The concept of , forced liquidation legal system
Mandatory liquidation is a very important problem in futures trading, is one of the many problems the current controversies in the futures market, and it is also the difficulty of legislation.
Generally, forced open the so-called, is when the Futures Company or the general customers in futures trading, the margin is not sufficient to maintain its open transactions, and no one margin in the exchange within the prescribed period of time, the futures exchange or Futures Company in order to protect the interests of customers and take relative to liquidate customer positions of a part or all of the behavior.
Practical futures trading process, forced liquidation is the focus of various conflicts of interests, different legal subjects each claim their views in the compulsory position closingclosing positions reason, responsibility, the forced liquidation problem becomes a difficulty in futures trading law.
two, the forced liquidation legal system theory
In the development of China's futures market for more than ten years, the legal nature of compulsory position closing law, the futures industry has been controversial, mainly has the rights, obligations and rights to say that compulsory three doctrines.
(a) the right to say
The main claim is that represented by Futures Company.Futures Company that, forced open the right but not the obligation.Futures Company that, the main futures trading is the customer, the Futures Company is in accordance with customer consignment to engage in futures trading agency business, the rights and obligations of the bear is the main customers, and not the Futures Company, and open positions is the customer, whether the margin by the customer decided, therefore, whether the positions should be decided by the customer, if not open, the consequences shall be borne by the customers themselves, there is no reason to take risks and losses on to the Futures Company.So, the forced liquidation of Futures Company is the right course, Futures Company can exercise their rights, also can be exercised, the loss shall be borne by the customer.
(two) obligations.
This kind of viewpoint thinks, forced open the obligations of Futures Company.The reason is that, when the customer loss and failed to timely margin case, the Futures Company shall timely take mandatory liquidation measures, there is no reason to wait until the customer margin losses, or even to the Futures Company with its own funds to pay guaranty money for customers pad, which is responsible for the customer, but also reflects the control, the market risk at the same time, it is also conducive to the protection of the interests of the Futures Company.If let customers overdraft trading, the actual additional losses are Futures Company in case of loss, overdraft more Futures Company will pay more funds, once the future customer bankruptcy or customers because of loss of too much and not willing to margin, will be the Futures Company will burden the loss.So, in order to avoid future risks, Futures Company has the obligation to positions in a timely manner, strengthen risk control, not only for the customer is responsible for is responsible for their own.
(three) the right to obligation
This view is that, from each link to force open the view, is the first manifestation of Futures Company's rights, namely when the customer's trading margin to achieve risk control line, Futures Company as long as to inform the customer, the customer does not add the deposit or not stand under the condition, can at any time to compulsorily close actions without customer recourse however, when the customer margin; further losses, the actual means Futures Company has been in advance to customers margin, or will advance to customers margin, in accordance with the exchange rules and regulations of futures contracts, the Futures Company shall not allow a client to overdraft trading, at this time, to control the risks continue to exist and expand, will become an obligation of Futures Company no matter in accordance with the law, or under contract, Futures Company should undertake their obligations.
A new interpretation of
three, forced open system
The author thinks, to fully understand the intrinsic mechanism of the mandatory liquidation system, should start from the legal nature of futures trading.
(a) the location of the legal nature of futures trading
From the point of view of the whole process of futures trading, the author defined as the essence of collateral sale.Mainly in two aspects the margin system and settlement system:
First, the margin system a first level guarantee strict.
Futures trading strict security system, either as members of a futures exchange Futures Company, or as a general investors Futures Company customer, in futures must pay a certain percentage of margin, to ensure that the futures trading can be carried out smoothly, and the insufficient margin, Futures Company or investors must pay within the prescribed time limit.Is the strict implementation of benefit from the margin system, the huge risk to the futures market implied to be controlled in a certain range.
In the author's opinion, the security deposit system in the whole process of futures trading, can be regarded as the first level of security, mainly to investors on their futures contracts to guarantee, for Futures Company is to sample, is a guarantee of its own on the transactions on its behalf of futures contracts.
Second, futures clearing guarantee a second level guarantee.
In futures trading, effective each futures contract must pass through the clearing of the clearing, and in the futures contract after settlement after the entry into force, then get the futures settlement guarantee on it, no matter what the holder of futures contracts, the contract can be fulfilled, the second level guarantee this is I said, namely futures clearing house of the guarantee contract.It is thanks to the clearing system operation, to ensure safe and stable operation of the futures market.But, on the other hand, settlement of futures contracts guarantee is not unconditional, only in the futures contract meet the prescribed conditions, clearing will confirm the contract effectively, so as to provide guarantee for the.
(two) starting from the legal nature of the futures trading of the mandatory liquidation system
After defining the essence of futures trading as collateral for sale, we for the internal mechanism of the mandatory liquidation system will find legal basis.
First of all, in the ordinary circumstances, the compulsory position closingclosing positions are due to the occurrence of the margin deficiency and not within the specified time period one margin resulting from the above analysis, futures trading legal essence, when the bond futures is insufficient, the futures contract will lose the first level of security, namely the futures investors did not the holdings of the futures contract provides sufficient security corresponding, in which some or all of the futures contract is no guarantee of the state, which is not allowed in futures trading.
Secondly, the author also mentioned in the above analysis on the essence of futures trading, clearing for futures contracts guarantee is second levels, namely, only on the basis of satisfying the first level of security, and must meet other conditions clearing will be guaranteed to take effect on the futures contracts, in the first level of security, the deposit has not been fully meet the circumstances, clearing of course not for this type of contract guarantee, therefore, the legitimacy of these contracts will be suspect.
According to our contract law in theory, after a valid contract, when the objective conditions for the establishment of the contract when the change, so that the contract cannot be performed effectively in the circumstances, the contract may rescind.Termination of contract according to different standards can be divided into unilateral rescission and legal rescission and termination of agreement, contract.
The need for forced liquidation of futures contracts, the effect has apparently not we need to address the problem, but for the entry into force of the conditions, clearly in the effect produced fundamental change, it is the fundamental cause of forced liquidation.
As mentioned above, the legal nature of futures trading as collateral for sale, one of its elements is the need for adequate security, either deposit or clearing guarantee short ~ not.However, due to the circulation of the transfer, the value of a futures contract is also changing, the number of required margin is also changed, when the number of investors or the Futures Company already meet the futures margin of its own contract not demand, namely the need to fill in a certain period of time deposit investment or Futures Company, if this during the period of margin not complement, as the settlement guarantee subject by second levels in the futures contracts do not meet the conditions prescribed by refusing to provide the guarantee, for this, the futures contract is actually not meet the conditions, shall be cancelled.
Conclusion four,
Based on the above analysis, the author draws the following conclusions, namely the futures trading is essentially a kind of secured transactions, the
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