Research On The Risk Control Of Real Estate Investment Trusts

In recent years, the real estate industry in China is developing rapidly in the process of urbanization construction supportted by the government, however, it still encounter financing bottleneck behind the flourishing. For the lack of a viable investment channel reluctantly, People's investment enthusiasm in real estate was wasted while personal savings is rising year after year in our country's banks. On one hand, the real estate industry is short of money, on the other hand, People have no place to invest by using savings, how to solve these two big problems at the same time for society's more healthy development? It has been greatly expected to solve these two big problems when real estate investment trusts was introduced as a new financing tool since 2003. However, every financial instruments has its risks, and the risk control is often believed to be the key of returns. As a product of asset securitization, real estate investment trusts contains lots of risks which are interweaved, such as the real estate market risk, the capital market risk and the fund operational risk. But no matter in theory or practice, the period of study on real estate investment trusts in our country is not long, and the law related is not uniform, not to mention the risk control system which is almost blank. Therefore, the demand for study and establishment of China's real estate investment trust is very pressing as it will be tried right now. For this reason, I try to explore the legal construction and improvement of risk control on China's real estate investment trusts by analyzing its current situation and existing problems about legal system and taking risk control systems of main Countries & Areas to be compared, as far as possible to reduce all kinds of risk that may arise during its process and to protect the interests of investors. This paper is focused on system designing and scheme supporting for legal construction and improvement of risk regulation system:in system designing, it mainly includes the consummation of trust registration system, the qualification authentication of administrator and custodian, the internal management mechanism of administrator and investors, the management regulation of project of administrator and the improvement of Information disclosure mechanisms; in scheme supporting, it mainly includes the building of special legal system of real estate investment trusts, the designing of the reasonable fund tax system, the establishing of fund secondary market, the cultivation of institutional investors, the perfecting of external supervision and the establishing of risk monitoring system.