Study On The Application Of Law Of Cross-Border Securitization

Asset securitization has its origination from the United States of America as a new kind of financing method in 1970s, and it has become one of the remarkable financial innovations since the twentieth century. The primary goal of cross-border securitization is to gain the comparative advantages of capital and law from international capital market as well as from different legal regions; to reduce financing cost; and to achieve the best combination of risk and profit. The conflict of laws arises because the cross-border securitization relates to different legal regions. Moreover, the increase in operation cost and trading risk becomes serious because of the conflict of laws. Therefore, it is necessary to study on the application of law of cross-border securitization with the aim to reduce the increasing trading cost. Based on the international conventions and the related regulations of some representative countries, this dissertation studies on the application of law of cross-border securitization, in which the author introduces the method of historic analysis and comparative study. The dissertation consists of four chapters, about 40,000 Chinese characters. Chapter 1 makes a definition of cross-border securitization and briefly introduces the operation flow of asset securitization, which is the footstone to discuss in detail. In financial market, law merchant is more efficient and more popular than the law constituted by the legislatives, but the latter is more foreseeable, practical, and fair. The major problems of cross-border securitization are cross-border assets assignment and cross-border issuing and trading of securities. Chapter 2 makes a study on the application of law of cross-border assets assignment. Assets assignment is the pivotal part of cross-border securitization. Whether assets assignment consists with the compulsory laws will influence the bankruptcy remote. According to the essence and practices of assets assignment, chapter 2 points out that assets assignment are assignment of creditor's claim, which is the development result of securitization of credit. Based on the detailed analysis of assignment of credit, assignment contract, the relationship between assignor and assignee, assignee and debtor, and the priority, this dissertation points out the party autonomy is restrictive owing to protecting the profits of debtor and the priority. Therefore, assets assignment needs to find a balance among different legal regions on case to case, which also needs to be foreseeable and consist with the compulsory laws. Chapter 3 makes a study on the application of law of asset-backed securities relating to issuing and trading. Asset-backed securities are the securities issued on the base of assets credit. It is different from the traditional securities which are based on the assignor's whole credit. The application of law of cross-border securities relating to issuing and trading is subjected to formulation of dependency, such as lex personalis, party autonomy, law of the place the securities is situated and lex loci actus. With respect to the asset-backed securities, because the SPV usually set up at tax haven, the environment for legal system is relatively less restricted. Therefore, it is a key factor for the asset-backed securities'issuing and trading whether immune from the law of the place the securities is situated. Chapter 4 discusses the current assets securities situation in China, and points out the cross-border securitization is a feasible way to deal with the problems of assets securities in China. The dissertation brings forward some specific suggestions on how to improve our legislations.