The Legal Study Of Information Disclosure On Asset-backed Securitization

As a most energetic financial creation since 1970s, Asset-Backed Securitization (ABS) has been put into practice by the effort of the people in theoretical and practical areas in China. It is an inevitable trend in our country in future. The post experience shows the course of financial creation is the course that ABS and legal system interact. The legal system pays an important role during ABS, it directly influences the cost and efficiency of transaction of ABS. Whether the law of a country promotes ABS is a key factor which influences the development of ABS. But the legislation of ABS lags behind the practice. Based on this setting, this paper explores the construction of the information disclosure on ABS on law which is the base of legal system on ABS, so as to serve the practice of ABS.There are six sections in this paper.Introduction. Firstly, this section puts forward the background of choosing the subject and research situation at home and abroad about this paper. Secondly, it introduces the studying method and clue of the paper, that is basing on one core principal ,three basic principals and protecting investors'benefit, in the way of comparison to study the information disclosure on ABS on law. The crucial problem is to find some specific features about this system. Lastly, this part sets forth the innovation, purpose and significance of this paper.The first chapter outlines ABS information disclosure. Partâ… points out the definition and function about ABS information disclosure focusing on eight investment risks in the structure of ABS. Partâ…¡concludes that it is essential to establish specific legal system of ABS information disclosure on the comparison of traditional securities information disclosure system in China and ABS information disclosure.Chapterâ…¡The Basic Theories of ABS Information Disclosure. Partâ…  puts forward the market inefficiency, the imbalance of information and the common product characteristic of information in practical capital market during ABS. So it is necessary to carry out compulsory information disclosure. Partâ…¡expounds the early-warning theory and safe-port policy are unsuitable for ABS information disclosure system according to the condition of future cash-interflow. Partâ…¢analyses the significant criterion about ABS information disclosure. The author advices that the dual criterion should be adopted which includes investor-decision principal and influencing stock price principal. Partâ…£sums up information disclosure frame on law about ABS chiefly and secondarily while focusing on the combine-quality and operation structure of information disclosure system on ABS.Chapterâ…¢Essentials and Legal Explanation on ABS Information Disclosure. Partâ… introduces the form of information disclosure. The information disclosure on ABS includes the disclosure of asset-backed security's issuing and exchanging. Partâ…¡is the important point in this chapter as well as this paper. First, it expounds essentials on the main line and explains legally, which should concentrate on the choice and composition ,the transfer of securitizing based-asset, credit-promotion and rating, agency services, safe measures of gains about based-asset. Because the quality and safety of based-asset, as well as stable future cash-interflow, is the main attention for investors, which is the key to success of ABS and focus of information disclosure. Secondly, it puts forward elements on the secondary line and legal explanation. The information disclosure should focus on the establishment ,operation and assets of SPV, in order to separate the bankruptcy risk.Chapterâ…£The Civil Liability of Fake Disclosure on ABS Information Disclosure. The first section defines that the civil liability of fake disclosure belongs to compensation liability for tort damage. Sectionâ…¡concludes the legal obligation subject of fake disclosure according to the process and principals of ABS. Sectionâ…¢analyses behavior distribution of fake disclosure on ABS information disclosure. Lastly, general elements of liability are studied for fake disclosure of ABS information disclosure in sectionâ…£, which focuses on the elements of liability of sponsor of ABS. The author believes that the sponsor is a real subject to finance during ABS, because it has a direct master and control the sources of risk information about based-asset, mostly understands the quality of based-asset. According to the principal"who benefits, who undertakes risk", it should be available for the SPV to share with the joint compensation liability without fault on the basis of fake disclosure about quality of based-asset which it offers to the SPV.Conclusion. First, it contains an analysis of the existing legislation about ABS information disclosure in China, and points out its shortcomings. Secondly, it suggests that the integrated legislating model of information disclosure of ABS on law should be adopted, which will be included in the specific legislation on ABS in our country. Then it outlines a brief summary of the contents in future legislation.At present, China is still on the legislative lagging about asset-backed securitization, there will be a long time to take to perfect the legal system. Meanwhile, some of the opinions in this paper are very shallow, looking forward to having an opportunity to engage in further research in this area in the future, so as to cover the defects in this paper.