Legal Issue On The Bankruptcy Remote Of Asset Securitization

The asset securitization is one of the most important financial innovations and tools in the international financial domain in recent years.It has been growing rapidly since its appearance in United States in 1970s.The mortgage-backed securities market becomes the second market in United States.Asset securitization,which is considered as the new trend of internationat capital market,is also becoming applied broadly in Europe and Asia.Asset securitization is a transaction process that transforms the assets that of low liquidity and produce stable income into assets that of high liquidity and separate from original beneficiary based on laws of collateral and securities.There are many reasons why asset securitization develops so rapidly around the world since its appearance,but the most important one is it creates a unique mechanism called bankruptcy remote.It's the key difference that knows from other financing means and core step in asset securitization, and it is the key factor of securitization transaction.It isolate the assets that produce cash flow and the bankrupt risk of sponsors and other relevant entities,in order to assure the cash flow that securitization that assets produce pay the securities investor that accords to the design of securities structure and realize financing by asset credit.The juristical construction of bankruptcy remote needs two key steps:first,construct SPV that accords with securitization,and make it a carrier of bankruptcy remote;second,the sponsor transfers securitization assets to SPV,in order to realize the "true sale" of securitization asset,in order to achieve the isolation of securitization assets,sponsors and other relevant entities.Bankruptcy remote reinforces the status of warrantor,make the realization of investors' interests avoid the bankrupt procedure,and provides new efficiency that temporary system can not for economical entity and capital market.Based on the above theory,this dissertation discusses several aspects that include the meaning of risk bankruptcy remote,its main function in the asset securitization transaction,the laws construct and legislative barriers that meet in the risk isolation mechanism construction in China.This dissertation brings forward suggestions on measures in the juristical aspect in the end and I hope it could benefit the legislation practice of asset securitization in China.