Research On Legal Matters Of Risk-remote Mechanism Under Asset Securitization

Asset Backed Securitization (ABS) is the most important innovation in financefield in the latest 30 years. Since it appeared in American capital market in 1960's,ABS develops prosperously in American capital marcket and in other important countries' capital market relying on its advantages in asset credit finance, structure finance and finance beyond the form.The essence of asset securitization, which is an important finance tool and finance innovation, is the mechanism of Risk Remoteness . In other words, whether or not the anticipated effect of asset securitization can be successfully realized mainly depends upon whether or not the risk-remote mechanism can be successfully established and operated. This paper aims to study the legal and accounting issues in relation to risk remoteness of asset securitization (i.e., true sale and bankruptcy remoteness) in current asset securitization field in our country which is a creation of the dissertation.The asset securitization in the country or a new phenomenon, which most people still know little about. Therefore, in the first chapter the dissertation first explored the related concept of the asset securitization and risk-remote mechanism. The second chapter describes the concept related SPV. The first chapter and the second chapter convey to the readers a general idea , the aim of which is to facilitate the discussion below.The third chapter and the fourth chapter of the dissertation details the specific legal matters of the risk-remote mechanism. In the real practice, the design of the risk-remote mechanism includes the achievement of "real sales" and the structure of a risk-remote SPV. The third chapter reveals several transition methods of the asset and the condition of utilization and analyzes the law nature and and effect of Real-Sale. Moreover, it explains mainly how to achieve "real sale". It requires that all rights, risks, or control rights be transferred altogether to SPV from the originator, in the process of which due attention should be paid to avoid the revocable transaction risk, the recharacterized risk and the commingling risk. The fourth chapter, through an analyzes on the business scope and prevention against bankruptcy risks of special purpose vehicle, describes the mechanism of bankruptcy remoteness relevant to special purpose vehicle. In addition, the chapter also analyses measures to strengthen the risk-preventing ability of special purpose vehicle in an attempt to realize an effective insulation between special purpose vehicle and risks, improve the safety and efficiency of asset operation and guarantee returns to each participators of asset securitization.The stem of the dissertation, the fifth chapter mainly is to solve the national legal matter. The biggest obstruction is the conflict between the need of asset securitization and the actual legal rules. The government has promulgated some legal documents to supervise the practice of asset securitization in China, but we must admit that the legal level of these documents was too low and there were even many issues which have not been prescribed in the documents . Thus, the chapter detaildly analyzes from the legal matters of asset securitization in China and provides the solvency methods of these matters in the base of the practice in China as well as some references of foreign countries.