The Study On Theoretical Basis And Pracices In China On Bankruptcy-Remote Mechanism Of Asset Securitization

Bankruptcy-remote mechanism is the core legal issue of asset securitization. Whether securitization will successfully accomplish the anticipated effect or not will depend on the successful establishment and operation of such mechanism.On basis of the latest legislature and practices in China, this paper will discuss the essential theoretical issues on the bankruptcy-remote mechanism and special problems encountered in china's securitization practices and provide several advices on improvement of the bankruptcy-remote mechanism in legislature.The introduction part describes in general the operation mechanism and the process of asset securitization and explains its critical function during the course of asset securitization.The first chapter discusses the theoretical basis of bankruptcy-remote mechanism. Firstly,it defines the legal meaning of bankruptcy risks,pointing out the resrictions of creditors'rights is the fundamental reasons of the above risks.Then,the paper explores the history of Bankruptcy Law and finds out that the change on the value of bankruptcy law, epecially the establishment of the reorganization mechanism, is the key issue of damaging the interests of creditors.The second chapter discusses the first step of asset secutitization–asset transfer .It introduces three ways of transferring. Then it elaborates in detail the relevant legal issues arising from the course of transfer of securitized asset, especially the"true sale"standards.In the third chapter, it firstly irtroduces the forms of special purpose vehicle and analyzes the advantages and disadvantages of them respectively. Then, this chapter makes a specific analysis of the design of bankruptcy-remote system for SPV, which means that SPV is immune from the bankrupty risk of the originator, of itself, of the incorporator and of other securitization entities.In the last chapter, according to the lateset legislature and practices in China, this paper discusses the key issues in two kinds of securitization supervised by different authorities.While discovering the issues, this paper also provides constructive suggestions and thoughts for the solution of the issues and uses great effort on stating between the context on the current legal situation and relevant consideration of bankruptcy-remote mechanism of asset securitization in china; Lastly, it presents a summary of this paper and concludes that we should, by relying on legal system, advance the improvement of bankruptcy-remote mechanism of asset securitization,and restates, in light of the current non-ideal situation of domestic legal system on securitization, the importance of strengthening the establishment of legal system and thereby building up the bankruptcy-remote mechanism of asset securitization in China.