Financial derivatives

1 Abstract/ Financial derivatives The purpose of this thesis is to provide an introduction to financial derivatives which has been, from the legal perspective, described in a not satisfactory manner as quite little literature that can be found about this topic. The main objectives of this thesis are to define the term "financial derivatives" and its particular types and to analyse legal nature of these financial instruments. The last objective is to try to draft future law regulation of financial derivatives and to determine the guidelines that future legislation will follow. The thesis is divided into four chapters; a short introduction is followed by a chapter concerning the origin of financial derivatives. In this chapter we learn that financial derivatives originate from commodity derivatives, which have their origins in a period ages before Christ. The second chapter is firstly concerned with determination of the term "derivative" and it further states the main reasons for which derivatives agreement are concluded. The reasons are hedging, speculation and arbitrage. Afterwards, four well- known types of derivatives, i.e. options, futures, forwards and swaps are defined in this chapter. The third chapter, named "Financial derivatives legislation", is dedicated to definition of current legislation of..