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r /> 2.3.1 Theories and destination of regulation on financial derivative market
What we regard as regulation on financial derivative market is a boundary and management of activities on financial derivative. Actually, Regulation on financial derivative market means a series of activities that monetary authorities regulate the financial derivatives activities by executive power to make the financial derivative markets running according to law (Evgeny, Panov.Stepan, Amossov 2005(2)).
The regulation on financial derivative market includes macro-regulation and micro-regulation. Macro-regulation mainly refers to the monetary authority to establish and improve the financial derivatives market and its operating rules and to avoid the occurrence of systemic risk. Micro-regulation mainly refers to the codes of conduct and trading strategies of the financial derivative market participants, establishment of the internal risk control mechanism to avoid heavy losses in financial derivative transactions.

2.3.2 Economic basis for regulation of financial derivatives market
“Market failure theory” and “information Economics” play an important role in the development of legislation of financial regulation (Taylor Michael, 1995b). By far, Market economy is the most efficient and dynamic human economic operation mechanism and means of the allocation of resources, and it has irreplaceable functional advantages by any other mechanisms and means. The main interest of the market-driven and free competition forms a strong driving force; it is highly mobilized people's enthusiasm and creativity. But the market its self-regulatory mechanism also has limitations; its function defect is intrinsic, inherent. The market itself is difficult to overcome the defect alone, and if entirely depending on the market’s spontaneous adjustment will make its shortcomings be greater than its advantages, leading to “market failure”, therefore it have to rely on the strength which above the market-- the Government, only that “visible hand” to compensate for this market failure (Taylor Michael, 1995b). Economists generally believe that market failure is usually caused by external effects, monopolies and public goods. The so-called externalities refers to the costs and benefits that enterprises or individuals imposed the person out-market, if the imposed is the cost, it is a negative externality; on the contrary, it is a positive externality. External effect is independent of the market mechanism with objective existence, it can not automatically weaken or eliminate by the market mechanisms, and often requiring use of market mechanisms’ beyond the power to correct and setoff. Thus, in the case of market failure, it will require the Government, as the identity of the market manager, to organize and realize the public goods supply, and give a necessary level of regulation to public goods’ use. Such financial regulatory functions of the government are mainly through the form financial legislation to achieve (Taylor Michael, 1995b).
Modern information economics think that information asymmetry is ubiquitous in the general market; this widespread information asymmetry is the major source leading to the risk of financial transactions and financial activities of adverse selection (Sol Picciotto.Jason Haines 1993(3)). In the circumstances of information asymmetry, not everyone has perfect information, and infor