Research On Protection Of Investors In Asset Securitization In China

Asset securitization is recognized as one of the greatest financial innovations since the80’s in the20th century which has played an important role for the prosperity of the financial market. Asset securitization is not only beneficial to lenders that pursue risk diversification and to those who aim at accelerating the capital turnover rate, but also provides the investors with new financial products. However, many problems were hidden behind the prosperous scenery, in April2007, the sub-prime crisis broke out in the USA financial market, and lead to a global financial crisis and of which we still can’t see the very clear end at today.The practice of asset securitization in China began at2005, and it developed very quickly, but compared with the USA, the market of asset securitization in China still needs a long way to be mature. So it is full of significance to discuss how to make full use of asset securitization’s function in promoting economic development while protecting the legitimate interests of investors and minimizing even avoiding the loss brought to investors in the asset securitization market in China at this time.This article is based on the above purpose and conducted from perspectives including legislation, true sale, format of SPV, intermediary services, ranking agencies and financial supervision to inspect loopholes in the existing mechanisms. And I give several proposals to protect investors, like unified legislation, proper format of SPV, proper way to define true sale, better disclosure mechanism, supervision of the entrance and exit of ranking agencies, the investors’education and the market players’ cultivation.