Legal System Construction Of Special Purpose Corporation In Asset Securitization

Asset securitization is a new type of financing technique which originated from and developed in American capital market of housing mortgage loan in 1970s. Asset securitization is accepted by many countries because of its advantage of asset-credit financing, structured financing and off-balance-sheet financing. Asset securitization can be defined as a process of packaging individual loans and other debt instruments, converting the package into a security or securities, and enhancing their credit status or rating to further their sale to third-party investors. Asset securitization is famous for the system design of special purpose vehicle.This article tries to study the legal issues relating to the special purpose vehicle and analyses the feasibility of setting up special purpose corporation in our country and put forward some suggestions for lawmaking.Our country start to make experiments of asset securitization formally in 2005. China Central Bank and China Banking supervisory commission announced"Administrative Measures of Asset Securitization"in April 20th 2005 which was legal basis for operation of asset securitization. Special purpose trust is adopted in the operation of Asset securitization. Since the investors have been familiar with corporation and in order to deepen reform of capital market and provide the originator with more types of special purpose vehicle, it is necessary to build up the legal system of special purpose corporation. and it is the direct reason for me to write this article.This article adopts the research methods of logics, history and comparison.This article consists of foreword, five chapters of text and epilogue. The total amount of characters of the article is about 35000.The foreword simply gives the meaning and purpose of this article. and it also tells main content of this article.The first chapter expatiates the concept and legal nature of asset securitization. And in this chapter, it reviews legal system of special purpose vehicle in many countries and makes us know legal status of special purpose vehicle in the operation of asset securitization from macro-angle.The main content of chapter two is about legal system merit and legal nature of special purpose corporation. It expatiates that special purpose corporation has the merit of property independent and risk remote, optimizing collocation of resource, interest protection of investors. It opens out that the legal nature of special purpose corporation should be limited company by shares.The main content of chapter three is about risk remote of special purpose corporation. It expatiates available asset for asset securitization, character and transferable of the asset and the issues of future income and bad asset. It also discusses transferring methods of asset and the risk of"real sale". It analyses bankruptcy-risk remote of the special purpose corporation and the risk of substance-coalition.The main content of chapter four is about legal system of special purpose corporation. It discusses legal system construction of special purpose corporation from the micro-aspect of establishment of corporation, structure of organization, regulation of business and supervision of corporation.The main content of chapter five is about legal system construction of special purpose corporation in our country. It expatiates history developing process of legislature and practice in our country and appraises character of legislature and practice of special purpose vehicle in China. And then it gives some legislative suggestions on special purpose corporation in China.