Legal And Regulatory Asset Securitization

This paper based on the theoretical study of asset sccuritization, mainly discusses the operation of asset securitization under the legal supervision from the angle of supervision and provides suggestions to perfect relevant legislation in China according to the current economic and legal condition. It consists of four part:The first part is devoted to a general introduction of asset sccuritization and make it clear that asset securitization is a means of financing for the originator to issue bonds by the "true sale" of the foundamental assets. To achieve this goal, SPV is the vital factor, and risk separation is its core. Besides it gives an account of the developing process of asset securitization and the development of asset securitization in China. Finally, it analyzes reasons for asset sccuritization from the aspects of financial mediums and unfinancial mediums.The scecond part, through the analysis of the relationships between asset securitization and financial innovations, and relationships between asset securitization and financial supervision, reveals the theoretical basis of legal supervision of asset sccuritization: such issues about market ineffectiveness as external effect, monopoly and information inconsistency. Therefore, it is necessary to supervise the asset securitization. The part further explores the necessity of the supervision on asset securitization from the angle of investors' risk, and it finally discusses the aim and limitation of asset securtization supervision.In the third part, first conies the construction of SPV. It sums up the assets which can be securitized on both the positive and negative sides, and discusses the current forms of title of SPV, and analyses places suitable for the construction of SPV from the angle of tax revenue. Second is about the operation of asset securitization. The author conducts a thorough analysis on the operation of asset sccuritization under legal supervision through five aspects such asasset transfer, credit upgrade, bond issue, asset management and SPV operating rules. First, this part discusses the ways of asset transfer and credit upgrade and its related issue of identifying "true sale". Second, it mainly introduces the regulations of the issue of asset-backed securities in the United kingdom and America, and analyses the important role all servers and trustees play in guaranteeing smooth of cash circulation and information disclosure and at last analyzes SPV's operating scope, separation, bankruptcy and other issues. Thirdly, this part discusses the supervision of asset sccuritization risk. In the author's viewpoint, the legal supervision of asset sccuritization needs all participants to construct effective SPV to guard against the risk of asset sccuritization, namely, the issue of how to separate the risk between SPV and the originator, SPV and SPV itself, and SPV and its founders. This is also a summary of the third part.The fourth part analyses the market condition and legal condition for conducting asset securitization in China, indicating that today's China still needs to further cultivate market environment and eliminate legal barriers. On such a basis, the author works out a supposition on supervisal system of asset securitization in China.