Study Of Cross-border Asset Securitization Legal Issues

As a financial method, the asset securitization has received the favor of theworld capital market with prosperous development since 70s of 20th century inAmerica. When this new financing tool was introduced to China at the beginningof 1990s, there were only a few securitizations because of China's economy andlaw. They almost adopted offshore model, so that domestic capital market can nottake advantage of this financial innovation. In 2005, the People's Bank of Chinaand China Banking Regulatory Commission promulgated some rules ondeveloping asset securitization in China. It seemed that asset securitization inChina entered the substantive stage. But there are many difficulties becauseChinese laws have no necessary rules about asset securitization, even domesticinvestors do not know what asset securitization really are. In this situation, re-examining the cross-border asset securitization, doing deeply researches, havepractical significance. This article is composed by six parts. Gathering with cross-border securitization, provide suggestions on cross-border securitization bydiscussing property transfer, the structure of SPV, tax and supervising problems atthe basis of introducing securitization's concept, reasons and basic operation. Inthe article, the author uses comparative analysis, real diagnosis analysis and someother research methods, in order to provide some good ideas for our legalconstruction of related aspects.The first part makes a simple introduction on the origins of assetsecuritization, compares securitization to factoring and project finance, in order toshow its characteristic and legal essence. Then identifies the concept of cross-border securitization, explores the reasons of securitization, and conducts a detailedstudy on cross-border operation.The second part is about property transfer. It is the first step of securitizationto isolate the property. We need to make sure what the property is. The authordiscusses how to realize the true sale by introducing the form of property transferand the judgment standard of true sale.The third part is the analysis of SPV. SPV takes core status in assetsecuritization. It is created for securitization. How to establish a SPV is no longer simply overcome the domestic legal barriers, but is the key to create an efficientstructure to low down the cost.The forth part is to discuss legal issues on tax, mainly including the domestictax laws of various countries, international multiple taxation and coordination. Theauthor elaborates tax legal problems at initiator, SPV and investors' angle.The fifth part is to elaborate the supervising problems of cross-bordersecuritization. The transnational flow risks the foreign exchange regulation. AndSPV needs to be carefully controlled according to foreign legislation practice.Today financial globalization develops rapidly; banks play a more and moreimportant role in cross-border securitization. So we have to pay attention to banks.The sixth part is about our own country's securitization problems. Whileemphasizes the vital significance of carrying out asset securitization in China,makes the evaluation of former examples, analyzes property, SPV structure, taxand some other important legal issues, to provide some suggestions forconsummation. The goal of exploring our existing legal problems is to show thatasset securitization in China is very difficult. In this situation, cross-bordersecuritization has practical significance in financing.