Legal Institution Research On The Risk Evading Of Commercial Factoring Assets Securitization

Commercial factoring achieved a fast development in 2014. Since 2012, the ministry of commerce has set up a series of pilots in Tianjin, Shanghai, Shenzhen, Guangzhou and other places, nearly 1000 domestic factoring companies were born.But most of them have very limited business, the main problem is the refinancing difficulty. If they can’t solve the problem of refinancing after accepting the enterprise receivables, their size will be inevitably restricted. Now most factoring companies can’t get credit from banks, so "re-factoring" cooperation between the factoring companies and factoring business concentrated on P2 P platform become popular.Since a series of new regulations on asset securitization were issued, more factoring companies and brokerages are conducting negotiations to jointly explore the cooperation mode of factoring asset securitization model. Since commercial factoring asset securitization is in the initial stage in our country, we need perfect legal system to control and prevent the risk point of each link. This article summarizes the feasibility and risks of factoring asset securitization under the current legal system and market environment,and then tries to propose some suggestions to prevent the legal risks.This paper is divided into four parts, the main content are as follows:The first chapter expounds the basic principles of the commercial factoring asset securitization. Firstly, the writer combines both the securitization and factoring business assets to analyze the connotation of commercial factoring asset securitization. Secondly, the writer analyzes the participants and transaction mode of the commercial factoring asset securitization.The second chapter is mainly to analysis the necessity and feasibility of the commercial factoring asset securitization in China currently. For the market’s own demand,the factoring asset securitization can be used as a new type of financing channel as the factoring company’s main capital channel is limited in practice.For the point of the government’s policy support, a series of laws and regulations about assets securitization were issued in 2014, and the commercial factoring management standards will be unified from local pilot to nationwide, theses changes will all help to promote the securitization of factoring.The third chapter mainly describes the law risks. Section I analyzes the main risks related to underlying transaction contract. Section II describes the debtor credit risk. Section III focuses on the irrationality of notification of creditor’s rights transferring. Section IV analyzes the risks of SPV’s undetermined scoping of underlying assets. Section V presents the risk of factoring company bankruptcy in securitization.The fourth chapter focuses on improving the risk prevention system of commercial factoring asset securitization. Firstly, We need to improve relevant laws on "creditor’s rights to transfer" system. For example, the prohibition provisions should apply "bona fides third party" system and so on. Secondly, we can not only use the credit ratings and enhancement tools, but choose the "reverse factoring" to guard against the debtor credit risk as well. Again, improving the special provisions of the law on the notification of creditor’s rights transferring is advised. In addition, SPV should define "all receivables" as the category of underlying assets. Finally, we should strengthen ’ "bankruptcy remote" mechanism for factoring companies.