Legal Risk Analysis And Prevention Suggestions Of The Right Of Return On Assets Trust

The right of return on assets trust is such a type of trust, whose trust property is the right to receive cash income by using and disposing of underlying assets. In recent years, the regulatory policies on trust grow tougher and tougher as a result of the implementation of economic restraining policy. In this context, trust companies have no choice but to change initial loans mode, and introduce innovative trust products, such as the right of return on assets trust, which has been widely applied in the domestic financial market. However, it is hard to find any clear legal rules regulating the trust of assets profit. As a result, it implied great legal risk.It is the most basic question that if the right of return on assets can be used as trust property. It cannot be concluded that the right of return on assets trust can run effectively from the eligibility of property. In fact, legal practitioners often take a wary attitude towards the right of return on assets trust because this kind of trust seems to have broken the existing legal framework, once the problems are exposed, it will bring immeasurable losses. This article will try to find the legal risk behind the deconstruction of this type of trust, and find the fundamental reasons from the basic theory of trust system.The logic of this thesis starts from the first case in this area in China, and then study it respectively from theoretical and practical level. In theory, this article mainly discusses the eligibility of the right of return on assets as trust property. In prctice, this article fouces on the legal risk and the reasons behind the risk. On the basis of above analysis, this article puts forward some gueestions. currently, quite a few innovative product structures are in an awkward position that there are no existing laws and regulations for them to follow, which brings great risk to commercial practice. It is necessary for trust industry to innovate the quantitative growth model, which is merely a disorderly combination of the old model and new model. At the same time, lawmakers also need to make cautious feedback without delay, in the form of filling the blank in law and revising the flaws in law.This thesis can be divided into four parts.The first chapter mainly introduces the first case(Anxin co. vs Chungao co.) in this area. Parts of the views in the judgement are questionable, this chapter will also introduce some different opinions. The last part of this chapter focuses on the question that if it complies with regulatory polies.The second chapter mainly talks about the legal basis of the right of return on assets trust. In the first part, it illustrates the important status of the trust property. In the second part, it introduces the certainty rules in Anglo-American law system and continental law system, and then concludes that China should also adopt the theory that the trust property shall be transferred. In the third part, it discusses whether the right of return on assets is certain and when it begins to take effect.The third chapter focus on the legal risks. It introduces the mainstream deconstruction of the right of return on assets trust and the legal risks behind it firstly, and then tries to find the fundamental reasons from the basic theory of trust system.The fourth chapter is about the suggestions to prevent the risks in the right of return on assets trust, such as improve the property transfer system, improve the publicity system, refine the information disclosure obligation and change the regulation principle.The conclusion of this thesis is as follows. According to the current theories and the law, the future creditor’s rights can be transferred effectively as it has the character of ascertainment. As a result, the right of return on assets is certain and can be uesd as trust property as it belongs to the future creditor’s rights. However, the usufruct trust products seem to have breached the standard structure in practice, leading to so many legal risks in usufruct products.The fuzzy law and the lack of related supporting system is the fundamental reason why usufruct trust products are out of the line with trust theories. Althouth the prevailing theory makes it possible to set up usufruct trust, it should also be combined with relevant laws and regulations to guide usufruct trust products in practice. In conclusion, this thesis put forwards some suggestions in terms of trust property transfer, the publicity of trust property and so on.