| From the end of 1960s to the beginning of 1970s, asset securitization was developed on a large scale. Though it origins from housing mortgage area, securitization was swiftly outspread to other industries and other developed countries or rising markets after 1970s because of its popularity among investors. Today, asset securitization has become the vital financing means depended by numerous enterprises on US financing market and the various financing products from it have turned out to be a necessary and irreplaceable part in the investors' portfolios. In general, securitization has exerted great influence on the development of US and international financing industry. Therefore, this paper conducts analysis on the legal structure of the most important organ ---Special Purpose Vehicle (SPV)--- in US asset securitization and details the bankruptcy risk insulation mechanism, which is closely related with special purpose vehicles.By the concept and the general procedure of asset securitization, the research coverage and clue of the article are ascertained. Based upon the asset securitization procedure, the status, significance and function of SPV in asset securitization are expounded. Besides, the tax law, bankruptcy law, business law and securities law issues related with SPVs are discussed. Enron bankruptcy case affects the structure of US SPVs, so this article selects those parts related with SPVs to explain the negative effects from abuse of SPVs. The end of the article is the application of the research achievement: consulting the US experiences to analyze the legal environment of China about structuring SPVs.In the foreword, the historical and research background of asset securitization and SPVs are briefly introduced. Then, the concept of asset securitization and the general procedure of asset securitization are given: 1. Originators define the asset pool to be securitized; 2. Structuring SPVs; 3. Enabling SPVs remote from bankruptcy; 4. Transferring assets; 5. Issuing asset-backed securities and/or debt securities.The body of this article is concentrated on the second step-structuring SPVs and the third step-enabling SPVs remote from bankruptcy. Since SPVs undertake the two roles of credit insulation and securities issuing, they possess abnormally vital status in asset securitization. How to guarantee their success in attaining the goals? The key lies in choosing legal forms. This article discusses the characteristics of SPVs separately adopting such four legal structures as trust, corporation, Real Estate Mortgage Investment Conduit (REMIC) and limited partnership. As a traditional legal entity, trust unexpectedly plays a great part in asset securitization. In US, most of the mortgage loans, credit and car receivables, and students' loans are securitized through trusts. By analyzing the characteristics of trust and special purpose trusts (SPTs), this article concludes the two advantages of trusts as SPVs: easy to realize risk insulation and acquire favorable tax treatment. From the point of functions special purpose trusts can be divided into four types: grantor trust, owner's trust, master trust and FinancialAsset Securitization Investment Trust (FASIT). Each of the four kinds of trusts has its features and originators can select according to their preferences.Special Purpose Companies (SPCs) can issue different class securities to investors without injuring its tax treatment and can securitize the basic assets of an originator or one batch of originators without considering whether these assets are related with each other. In addition, these securitization transactions can be conducted meantime or in turn. As a result, compared with SPTs, SPVs can greatly expand the scale of asset pool and thus reduce the relatively higher initial issuance expense. The disadvantage of SPCs is that the net income of the company will be levied tax.US Tax Reform Act 1986 provides a fresh identity for SPV: Real Estate Mortgage Investment Conduit (REMIC). REMIC is just an identit... |
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