On The Assets Of The Trust Credit Assets Securitization And The Transfer Of Legal Issues

Asset securitization, as one of the financial innovative tools, refers to a specific form of financial transaction in which an originator transfers certain types of illiquid assets (typically loans or receivables) to a special purpose vehicle and turns them into securities with high liquidity in the capital market through some kinds of packaging. Because the structure of asset securitization is exquisite and can realize risk remoteness between the assets and the originator, it is very popular in the international financial market. There're already some practices in the securitization of credit assets in China, and most of them adopted the way of trust in the process. Under the trust-style asset securitization, the originator entrusts the assets to the trustee's management and the trustee issues beneficiary certificates which can be invested in. As asset securitization is a newly emerging financial tool in China, the present legal system is not well adapted to it and there're some obstructions to its practice. Though "Measures for the Pilot Administration of the Securitization of Credit Assets" was promulgated in 2005, its force is comparatively low and the scope of its application is limited. Furthermore, it doesn't define clearly all the problems in the securitization. This paper focuses on the problems in the transference of assets in the asset securitization and uses comparative and analytical methods in the discussion to clarify the trust relationship and define the rights and obligations of each party. The legal principles relating to the assets transference and some obstacles in the law are also discussed in the paper. Some suggestions about the future legislation are brought forward in the last part. The writer hopes that the paper can be used for reference in the practice of asset securitization and this financial tool can play a great part in the economic development of our country.