Legal Issue Analysis Of Non-performing Bank Asset Securitization Under Trust Model

By means of asset securitization,a kind of innovative structured financing technology,the banks have effectively disposed substantial assets as they manage non-performing assets(NPA),which has become the important way for banks to dispose NPA since the present stage to future.Bank NPA securitization under the trust model taking special purpose trust as the carrier,trust legal relationship as legal structure of principal line,has been successfully merged and applied with transaction structure of bank NPA securitization.However,trust system was transformed to be consistent with the national conditions of China when civil law system transplanting it from Anglo-American law system,but the disposition of right and duty of China's trust legal relationship was unfit for the development demand of realistic business trust,and then biased selection on valuation was caused,which led to the lack of protection to investors during NPA securitization,and furthermore,the complicacy of asset securitization transaction structure also generated a lot of deficiencies of related legislation and practice.Therefore,this paper illuminates the problems during NPA securitization practice of China's banks combined with typical cases,with clarifying legal logic of bank NPA securitization under trust model as origin,and also trust legal relationship as principal line.Moreover,this paper also proposes to establish the governance mechanism against bank NPA securitization with benefit safeguard of trust investors as center,improve its top-level design,correctly build legal relations between each party of trust and furthest make trust asset securitization financing technology play a positive role,for providing system support for banks to dispose NPA.This paper is mainly divided into three parts:The first part introduces the general theory of bank NPA securitization under trust model,and also illuminates the legal relation referred in its basic meaning,legal logic and securitization process,to discuss bank NPA securitization under trust model from the view of ought-to-be,and put forward theoretical basis and logical starting point for the latter case study.The second part is about the introduction of present-situation inspection and main problem analysis of bank NPA securitization under trust model in China.The development situation of bank NPA securitization in China is arranged,with “Phase-one NPA securitization of Zhongyu” project issued by Bank of China in 2016 as the typical case,to point out the deviation of NPA securitization value orientation under trust model in China combined with the demand of business trust law relationship,and also analyze legal questions therein it,for specific performance as 6 problems including risk focus of trust property and lack of publicity,unknown legal logic of transaction structure,excessive right assignment to investors,faith obligation absence of trustees,ineffective benefit safeguard of beneficial investors and inadequate supervision of existing separated system.The third part proposes to establish a governance mechanism against NPA securitization under trust model in China with benefit safeguard of trust investors as center,solve legal problems exposed in practice with target,thereby to correct the deviation of value orientation,and furthermore to preferentially protect the interests of investors.To that end should be from 5 aspects,including improving top-level design of trust and asset securitization,building a bank NPA pool of risk diversification and trust publicity,realizing risk isolation mechanism of real sale,reconstructing rights and obligations of trust tripartite subject,and finally is insisting financial regulation of compulsory information disclosure.