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On Special Purpose Vehicle In Asset Securitization

Posted on:2005-08-17Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y J XieFull Text:PDF
GTID:1116360122981865Subject:Economic Law
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Asset securitization, as a kind of structured finance, is one of the most influential financial innovations in the world in the late 30 years, and is bringing into play a more and more important role in the international financial market. In a typical asset securitization, a company (usually referred to as the "originator") sells rights in income-producing assets—such as accounts, instruments, lease rentals, franchise, license fees and real estate, and other intangible and tangible rights—to a special purpose vehicle (SPV). The SPV, in turn, issues securities to capital market investors and uses the proceeds of the issuance to pay for the assets. The investors, who are repaid from collections of the assets, buy the securities based on their assessment of the value of the assets. Both of the originators and the investors can benefit from asset securitization. The most characterization of asset securitization is the SPV. The subject of this dissertation is the legal problem of SPV in asset securitization. This dissertation analyzes the fundamental principle and the mechanism of operation of the SPV. Two kinds of SPV, including special purpose corporation (SPC) and special purpose trust (SPT), also are discussed in the dissertation. As a result, the dissertation gives some legal proposals for the establishment of SPV in China.SPV is the transferee of assets and also the issuer of asset-backed securities (ABS). As an instrument of asset securitization, the core of value of the SPV is risk-remote. The SPV is a bankruptcy-remote entity. Because the SPV (and no longer the originator) owns the assets, the investors' decision often can be made without concern for the originator's financial condition. Asset securitization is a kind of dealing between originator and investors. To protect the benefits of investors is the key problem of the legal system of SPV. There are two kinds of main measures to protect the investors. One of measures is the regulation of the government, and the other is the measures of protection by investors themselves. The regulation of the government includes admission of the establishment of the SPV and the issuance of ABS and compulsion of disclosing information. The investors can protect themselves by the securities-holders meeting and supervisor of the securities. Furthermore, the priority to the asset is also an important measure for the securities-holders.In China, it is necessary to introduce asset securitization for the banks, trust companies and other companies. But in China, there are some obstacles in the legal system. We need enact to accord with the SPV, including legal system of SPC and SPT, specially the legal system to protect the benefits of the investors. Whereas the Trust Law is enacted in China, it is more feasible to introduce SPT than SPC.
Keywords/Search Tags:asset securitization, asset-backed secutity (ABS), special purpose vehicle (SPV), special purpose company (SPC), special purpose trust (SPT)
PDF Full Text Request
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