Reflection and Reconstruction of Judicial Rules for Determining the Validity of the Off-market Financing Contract in Securities Market

Abstract：In essence，off-market financing is the behavior of speculating in the stock market with the borrowed money， and the legal relation is complex. There are different standards that can be used to determine the types of related contracts ，and according to contract framework，the contracts can be divided into different types，such as the direct transaction between the two parties of the financing，P2P internet financing，and the umbrella structural trust financing. In practice，the main stream viewpoints tent to believe that the off- market financing is the violation of the national franchise regulations for it includes the violation of the real-name system for borrowing securities accounts and the violation of social public interests. So ，the off-market financing contract is determined as invalid. Based on this ，Shenzhen Intermediate People’s Court puts out the innovative viewpoints，namely the separation of contract validity and contract effect. With the release of the Minutes of Ninth National Courts’ Civil and Commercial Judicial Work Conference ，the off- market financing contract has been thoroughly determined as invalid. But because the national franchise regulations cannot be used as the basis to determine the invalidity of contract ，the borrowing security account is not the violation of the real-name system ，and the related terms of social public interests are not suitable to offmarket financing. So，the invalidation of off-market financing contract is hard to be tenable. To better determine the validity of off-market financing contract，we should face directly the leveraged market risk，adhere to the basic idea of focusing on privacy protection，respecting autonomy of will，and protecting financial innovation，conditionally determine the validity of off-market financing contract，allow the borrowing of security account，set up the accessing standard and the recording mechanism，improve the capability of supervisors and judiciary authorities，promote the transparency and standardization of off-market financing， treat fairly with financing in and off the market，and so on.

Key words：off-market financing；contract validity；privacy protection；autonomy of will；financial innovation