On Improvement Of Legal System For Floating Charge In China

Floating charge, a special credit guarantee system, was first raised by the English Court ofChancery in the middle of19thcentury and has gradually improved and perfected since then. Theeconomic development needs Floating mortgage system to break the traditional limits ofsecurity, which not only reflects the physical security value, but also gives full play to the use valueof the property. Thus the floating mortgage system, to a large extent, eases the financingdifficulties of the economy and promotes the social and economical development.With the continuous and profound changes in social system and gradual improvement ofeconomic system, Chinese economic system has gradually integrated with the global economy. OnMarch16,2007, in order to promote China’s real right for security system reform, expand therange of applicability of the warrant, and solve the problem of corporate financing, the governmentformally issued the "property law", with three articles summarizes the floating mortgage system.This formally suggests China has introduced the floating mortgage system. However, there areproblems which prevent the functioning of floating mortgage system. For example, the range ofmortgagee is too generalized, the objects of mortgage are too narrow, and priority order is notspecified together with registration problems such as lack of maneuverability. And thereforematching mechanism must be redesigned to fit the local conditions, in order to play the role offloating charge.This thesis, imbibed the spirit of codes at home and abroad and incorporated into the concretecondition of legal practice in our country offers deep insight into the weaknesses of floatingmortgage system through the case of a typical commercial bank and will proposes some measuresand solutions to the problems with an aim to help floating mortgage system give full play tosuperiority in the current economic environment.There are three parts in the thesis and the body is composed of the following three parts: The first part talks about the basic concepts of floating charge with a main focus of thedefinition and characteristics of floating mortgage system. And the thesis makes further analysis ofthe historical development of the floating mortgage system and its inherent value contained.The second part studies the current situation and problems in practice of floating charge by atypical case of a commercial bank. This part provides a profound understanding of the problemsand risks faced by the floating mortgage system in the process of implementing.The third part deals with the measures of perfecting the legal system related to floating chargefrom two aspects. One is lawmaking while the other is assertion of mortgagees’ rights. On the issueof weaknesses in lawmaking, the thesis suggests two solutions both from macro and microperspective.