International Comparative Research On Special Purpose Vehicle In Asset Securitization And Reference To China

Asset securitization is one of the most influential innovation of finance in the field of international finance, it has become an important trend in the development of global finacial market since1970s. Asset securitization helds varies of advantages, such as low entry barrier, high financing efficiency successful risk trasfering and so on. It was first originated in the securitization of housing mortgage loan in United States, and then quickly spreaded in the accounts receivables of trade and services, credit card loan and other relative financial busines fields. Asset securitization began to boom in the European market in1980s, then it entered into asia-pacific area in1990s and developed rapidly. The influence of asset securitization to the development of finance and economic, gradually increase into significant with the economic integration and financial globalization. China introduced Asset securitization since1990s, has carried on some fragmentary practice before credit asset securitization pilot work in2005, which was an milestone of asset securitization in our country.Asset securitization refers to an institutional arrangement that a subject using the existing assets as basis, transfering them to securities assets to finance. As a way of structured finance, it ensures the work of bankruptcy isolation mechanism, plays a decise role in the process of operation. All the effects above owes to the Special Poupose Vehical (SPV), which is the masterstroke of the whole securitization process, and the key to the tradsaction.SPV is an independent legal entity for asset securitization, which is the core and center of transaction structure. Its goal is:in the constraints of risk minimization and profit maximization, SPV trys its best to making the cash flow of foundamental assets meet the needs of investors by the most appropriate means. As one of the most important intermediary institutions, SPV realizes the separation of underlying assets and sponsers as well as other subjects, guarantees the stability of cash flow. It connects intermediary service institutions such as trustees, rating agencies, guarantors and securites underwriters.As a financial innovation ready to be applied in China, asset securitization could fufil important functions, such as deepening the reform, vitalizing liliquid assets, improving the mechanism of investment and financing, raising the sufficient rate of the capital of commercial banks, strenthening the ability of asset-liability management. Combining the current laws and specific situation in China, select the establishing mode of SPV, is an important part of asset securitization in China. In this paper, the development of asset securitization and selection of SPV mode in some developed country and area will be compared and analyzed, the nature and clue of them will be summaries to analyze the further process of asset securitization in China. Hoping that the presents of considerable factors, improving matters and choice of mode could provide some realistic theory and suggestion to the sustainable development of asset securitization in China.This paper is divided into three parts altogether:introduction, international comparison and reference to China.The first part is "introduction". In this part, the research background and significance will be presented that asset securitization is one of the most important financial innovation in modern financial market, and SPV plays a key role in it. Then the concept, developing process and general operation procedure of asset securitization will be included. Through the definition, function, form and mode of SPV, there comes that SPV should be established according to specific situation and purpose in each country without a fixed mode. In the last, a literature review containing research at home and abroad is presented, together with explaination of research methods, possible innovation and deficiency.The second part is an international comparison of SPV. Through sketches and tables, a comprehensive comparison of SPV in United States, Canada, Japan and Hong Kong will be made in the aspects of mode, transaction structure, characteristics and main businesses. In conclusion, SPVs in US, Canada and HK are established by government or remain public nature. Their governmental background provides the products high credit level, low financing cost and confidence from investors. SPC in Japan is not set up by the governmental, but accept guidance and convenience provided by government. Therefore, according to international experience, SPV is more likely established by government in the beginning of asset securitization, which helds more authority and feasibility.The third part is the international reference to China. In this part, the realistic situation of asset securitization in China will be first presented. With the advantages and necessities of conducting asset securitization listed, the external environment and financial institutions’enternal damands will be analyzed. Asset securitization is practical in our country and several cases are already carried out into realistic. In2005, there was a pilot practice of credit assets securitization in China, with China’s National Development Bank and China Construction Bank acting as the pilot units, this practice was a milestone in the history of asset securitization in China from theory to real practice. Then two kinds of SPVs in credit asset securitization will be compared and analyzed, through which we can see in both the credit and enterprise asset securitization there are no SPVs setting up according to strict international standards. This situation does no good to the healthy and rapid development of asset securitization in China. At last, on the basis of obstacles of law, accouting, tax and system environment in SPV establishment, together with the matters of independence, risk isolation, limits of law and regulations, possible cost saving and others when selecting SPV mode, this article concludes that several modes can be the upper choices:SPT, SPC(including state-owned and asset managemet company-ruled), offshore SPV and SPP. By comparing the advantages and disadvantages of each mode, some relative polices and suggestions of further standards in China’s asset securitization will be proposed in the end.Since the coming of asset securitization, SPV play the role of a central hub, connecting the sponsors, investors and a series of financial intermediary service agencies, effectively to asset securitization comes out independently in this step from the lending program, greatly reduces the required risk investors, improve the market confidence. Compared with America’s financial markets of developed countries, such as on the diversity of financial assets in our country is more simple, but in recent years, our country has been working for the pilot securitization of credit assets, also shows the change of determination and considering what our country will be used as a "shell" of the SPV to assume liability to the core of asset securitization, this article through to the United States, Canada, Japan, Hong Kong four countries and regions set up SPV mode, based on this discussion, in order to make a little contribution to the development of asset securitization in China.