The Normative Approach How to Financial Derivatives Transaction Innovation Reshapes Directors’ Fiduciary Duties: From a Chinese Perspective

With accelerating global financial innovation, the high leverage, cross-market interconnections, and complex structuring of derivatives trading have exerted multidimensional effects on China’s director fiduciary-duty regime under Article 180 of the Company Law. A static regulatory framework cannot accommodate the dynamic risks of transactions. Multiple conflicts of interest and the need for cross-domain regulatory coordination have exposed institutional problems: unclear identification of loyalty conflicts, the absence of professional standards for the duty of diligence, and inadequate transparency in information disclosure. This paper is grounded in the Chinese legal context and financial-market practice. It centers on risk control, prioritizes protection of stakeholders, and relies on regulatory enforcement. By clarifying the legal core of “risk-related obligations”, strengthening coordination between public and private law, and proposing a graduated standard for judicial review, the paper outlines a practical approach to: (1) align fiduciary duties with regulatory rules, (2) refine duty standards precisely, and (3) provide comprehensive, chain-wide regulatory safeguards. This paper aims to reform the static fiduciary-duty framework in China’s Company Law and to enrich theory at the intersection of company law and financial law. It seeks to inform financial-regulatory policy, promote greater uniformity in judicial decisions, and improve internal governance of financial institutions. Ultimately, these measures intend to balance the dynamism of financial innovation with orderly market governance.