Study On Legal Issues In Relation To Asset Securitization

Firstly, this paper introduced the development of asset securitization in the United States, the place of its origin, and introduced its definition and characteristics. Then the purpose of asset securitization to act as financial innovation instrument was analyzed in respect of its nature and effect.Secondly, this paper analyzed the development of asset securitization in China in combination with the progress of China's legal system. This paper demonstrated the current major asset securitization models in China with its respective legal regulations. The major models included credit asset securitization, securities company's specific asset management plan, asset-backed notes and insurance asset management company's specific asset management plan by. By illustrating typical cases in credit asset securitization and securities company's specific asset management plan, this paper analyzed main legal issues from its deal structure, transaction arrangements and guarantee procedures.After summarizing the significance of asset securitization to the development of Chinese capital market, this paper proposed some major problems in Chinese current legal system on asset securitization. There are no guidable laws and regulations at legislative level. There is no adequate legal basis to recognize special property rights as the underlying assets. The legal status of securities companies' specific asset management plan is not so clear. The current sub-sector regulatory system in financial industry needs reorganization. And the current credit enhancement methods need to be improved and the core functions of asset securitization have not been fully realized.By discovering the problems in current legal system and learning from advanced experience of foreign countries, this paper proposed some suggestions to solve the above problems in legislation and supervision. The State Council could promulgate a regulation concerning asset securitization. Transactions between different markets should be encouraged and supported. A unified financial markets supervision system should be established and efficient credit rating system should be improved.