Derivatives: its nature, origin, and impact on securities and contract law

Abstract

In developed market economies around the world, derivatives are no longer a strange and new issue. However, for a developing economy like Vietnam, derivatives only appeared recently in the Law on Securities and have been traded in Vietnam’s stock market in the past five years. It is clear that the emergence of derivative has had certain influences over the legal system in general, including securities laws and contract laws. With the purpose of creating a fuller, clearer picture of derivatives and theirs impacts on the legal system in general and securities and contract law in particular, the article focuses on two issues: 1) Clarifying the nature and origin of different types of derivatives; 2) Analysing the impacts and effects of derivatives on securities law and contract law in the contemporary context.