The Applicable Scope of China's Futures Legislation

摘要

China's "Administrative Regulations on Futures Trading" have been facing many challenges in recent years, for example, the applicable scope is too narrow to cover OTC derivatives; secondly, the securities derivatives are under double jurisdiction of the Regulations and the "Securities Law", which has caused controversy on application of regulations. The legislative work of the "Futures Act" is proceeding in China, so the applicable scope of the "Futures Act" of China in the future shall be appropriate arranged based on fully understanding the market characteristics of futures and derivatives, that is, to "take the derivative contract of hedging risk mechanism" as its applicable scope, and include the OTC derivatives into management. For the issue of double jurisdiction of securities derivatives, it should be divided according to product characteristics, which means the "security-type" securities derivatives applicable to the provisions of the "Securities Law" and the "contract-type" securities derivatives are limited to "exchange traded product" or "OTC products with hedge risk trading mechanism" are provided by the "Futures Act" in the future.