Walter Hutchens’ Blog

Last week in Shanghai I gave a short talk about legal aspects of developing financial derivatives in China.

It was part of a forum organized by the Chicago Mercantile Exchange in conjunction with the Shanghai Stock Exchange and Shanghai Futures Exchanges.

CME did a great job putting the event together. They brought together key people (plus a few dubious invitees like me) from within China and abroad and had a rich program.

The panel I was part of included Wanda Tung from JP Morgan Chase who gave a very useful talk on the importance of close-out netting (so that parties net out their obligations in a bankruptcy situation, rather than a party having to pay their obligation into the estate before getting (some portion of) what they are in turn owed). Walter Lukeen, a commissioner of the US Commodity Futures Trading Commission, was also on the panel, along with Jerrold Salzman, a lawyer who’s been advising CME since before I was born. Yang Maijun from the CSRC responded cordially to all our suggestions (and said he liked in particular my idea about establishing a specialized court for high-value securities and financial derivatives case).

Nobel laureate Myron Scholes actively participated in the conference. He sat in the front row when I talked. I didn’t then realize who he was (oh, that Scholes, as in the Black-Scholes option pricing model). It’s probably a good thing I didn’t, otherwise I might have been too nervous to proceed. But it turns out he’s a very friendly, gracious person.