Research On Legal System Of The Cross-border Asset Securitization Risk Supervision

Asset securitization has the characteristics of structured finance. There are different legal systems and economic surroundings in different countries. In order to minimize the cost of financing, financers always display the different aspects all over the world with the minimum cost, so that the cross-border asset securitization is born. Risks as well as cross-border asset securitization always accompany with the financial risks. Such as true sale risk, fraud risk, tax risk. These risks have prompted the state to exercise supervision over cross-border asset securitization, also, due to the flexibility of cross-border securitization, domestic law of a single country can not effectively supervision it,meanwhile, these countries also have conflicts of jurisdiction on supervisory power. Therefore, based on investor protection and safeguard international financial security concerns, it is necessary to build cross-border asset securitization supervision legal system to keep investors away from risks, while as a supervisory guidance for the coordination of relevant countries.This article aims to analyze the main types of potential risks of cross-border asset securitization from a legal point of view, explore the establishment of reason and method of cross-border asset securitization risk supervision, and proposes the construction of risk supervision legal regime's in view of our country's special economy and legal environment.In Introduction part, author first defines and explains the research theme, and briefly analyzes existing research achievements. Furthermore, author continues to introduce the basic theory framework and major issues to be explored.In Chapter 1, author first briefly analyzes the basic definition of cross-border asset securitization, and figure out essential characteristics of cross-border asset securitization and cross-border asset securitization supervision legal system.In Chapter 2, author analyzes the reasons to construction cross-border asset securitization supervision legal system. The main conclusive points of our research are:1. Theory of national sovereignty; 2. Theory of international financial security; 3. Theory of international investors; firstly, in the modern international society, a country usually based on its domestic law to supervision the risk of cross-border asset securitization. It has the power to do so due to the theory of national sovereignty, consider legal system on the supervision of the risk of cross-border asset securitization, the theory of national sovereignty reflected in two aspects:1. respect for national sovereignty. Whether and how to construction of legal system depends on independent and voluntary of one country.2.sovereign equality of States, therefore, there may be conflicts of jurisdiction, such conflicts, often will result in the risk of cross-border asset securitization beyond the supervision. Thus, it is necessary to build cross-border asset securitization supervision legal system to keep investors away from risks, while as a supervisory guidance for the coordination of relevant countries. Secondly, the core step of securitization is the issuance and trading of ABS whereas the most important issue is the problem of protecting investor's rights and interests. To protect such rights and interests, setting up an efficient regulation legal system is in great need.In Chapter 3, author analyzes supervision legal system on the risk of cross-border asset securitization in different countries. Cross-border asset securitization includes a number of risks, such as true sale risk, fraud risk, tax risk, exchange risk. The author analyzes the different legal system on regulation of cross-border asset securitization in this chapter.In Chapter 4, author stresses the problems and causes to construction cross-border securitization asset supervision system in China.In Chapter 5, author clarifies the characteristics of cross-border securitization supervision legal system in china. Also, some countermeasures and proposals to the existing problems are developed.The supervision of the risks in cross-border asset securitization is crucial to the healthy development of the industry and the financial market as a whole. The various risks in the transaction include market risks, credit risks, liquidity risks, legal risks, operational risks, etc.These risks that exist in the wide range of domestic and cross-border asset securitization operation can be seen as the risks inherent in asset securitization. Compares with the domestic property securitization, the transnational property securitization to a certain extent will possibly increase these inherent risks. For instance, the uncertainty will also increase, with the market risk transforms by the domestic capital market into the international capital market. Another example is credit risk, as compared with domestic securitization, investors and the original debtor do not have the same nationality, which allows sponsors and investors, and other information on the debtor's solvency is more asymmetric. Simultaneously, "transnational" will also cause the cross-border asset securitization faced with a series of special risks. Therefore, it is important to supervision it. Although the cross-border asset securitization's risk is very complex, countries in their implementation is still lack of effective regulation, which requires a theoretical exploration.In our country, a few research on the legal supervision of securitization now. Introduced securitization, this finance innovation is deficient supervision in china. From this. point of view, the research on legal system of the cross-border securitization risk supervision has a practical significance. Relying on the theories of law and finance, based on the theories and practices of Asset-Backed Securitization supervision of modern western countries whose finance is better developed, and by using the method of combining theories with reality, this paper discusses the legal supervision of cross-border securitization and presents some suggestions on how to consummate related legislations in China.