On Asset-backed Securities Issued By Legal Supervision

Asset-backed securites are securities that are backed by a discrete pool of self-liquidating financial assets. There are various types of asset securitization including securities backed by mortgage known as the Mortgage-Backed-Securities (MBS); securities backed by non mortgage type assets known as the Asset-Backed-Securities (ABS); Synthetic Securitization product known as Collateralized Debt Obligation (CDO); etc. ABS, MBS, and CDO are three main products of asset securitization. However,There are differences between them especially in the categories of legal criterion, regulation, and operation mode. This article will focus on issuance and regulation problems related to ABS. Problems about the other two products will be briefly addressed only when they are relevant to our main topic.Asset securitization is a method for asset's credit financing.lt is the structuring process whereby assets with low liquidity but stable cash-flow are packaged and sold as securities backed by its credit. Being one of the most important financial innovations in the twentieth century, asset securitization has become increasingly fashionable in many countries' capital markets for over thirty years.lt is considered as the apotheosis of modern financial innovations and an important financial tool under current financial development trend. ABS provides banks, enterprise and asset owners new financing tools, at the same time it offers public investors more varieties of investment instruments, Compared to traditional stocks and securities, ABS has its particularity in the aspects of legislation and regulation,which are the most important points related to its issuance and further development. Therefore there exists a big obstacle for China to introduce such product.This article is mainly focused on issuance and regulation of ABS, investigating its legal system systematically and thoroughly analyzing its special properties as well as supervisory systems which highlights information disclosure. It also analyze the special operational mechanism of issuing the principal part of ABS, following the example of American's ABS supervisory law.Moreover, we analyze some specific supervisory system such as issuance registration, information disclosure and post-issuance report. Base on theoretical research and practical examples, This article start off with the particularity of ABS and the purpose of protecting investor's benefit to propose a feasible plan to set up an effective supervisory framework and legal system for this new financial product.. Thorough analysis of this topic will lead to a new angle of view that will enhance our knowledge of the essence of ABS, inspires us to handle the relationship between financialinnovation and market regulation correctly, enriches the contents of security market regulation.Hence the research on this topic is theoretically valuable and is a big help to the perfection of our regulation and legal system..The core step of asset securitization is the issuance and trading of ABS whereas the most important issue is the problem of protecting investor's rights and interests. To protect such rights and interests,seting up an efficient regulation legal system is in great need. Therefore at the beginning of the pilot ABS project we should commit ourselves to set up and consummate the regulation legal system. The main conclusive points of our research are: 1.Legal system of issuance regulation will help us to standardize and advance development of ABS market so that it should be set up as soon as possible; 2.It is neither efficient nor feasible to amend the existing law and code,so special asset securitization is indispensible; 3.To establish a regulation system centered in information disclosure is important,to prevent either over-supervising that will suffocate market development or under-supervising that will lead to accumulation of system risks; 4> It is necessary to construct a legal framework for ABS issuance regulation as follows: 1) To clarify the characteristic of ABS and bring it into the security legal supervisio...