Research On The Derecognition Of The Asset Backed Securitization Products Under Thecycle Purchase Structure

Since the restart of credit asset-backed Securities in China in 2012,the business in China's capital market has developed rapidly.ABS plays a unique role in revitalizing the stock of assets and broadening the financing channels of enterprises.It also attracts more and more enterprises and financial institutions to participate in this business.At the same time,along with China's economic growth mode changes,consumer finance industry began to rise.An important feature of consumer financial assets is small amount of each loan,short duration.Traditional ABS transaction structure is not suitable for this type of underlying assets,in order to solve this problem,there has been a circular purchase structure of ABS products.This structure effectively solves the problem of the maturity mismatch between the underlying assets and the ABS.From the point of accounting,many institutions issue ABS in order to remove financial assets from the financial statements.Although the cycle purchase structure can solve the technicalproblem,but under the existing accounting standards,the issuers will face more obstacles.This paper chooses the case study of the first phase of personal consumption credit ABS in 2016 which is issued by China Merchants Bank.In recent years,China Merchants Bank has been trying to be a "light bank".The first phase of 2016 consumer credit asset-backed securities is the first credit card ABS of circularpurchase structure in China,and can remove these financial assets from the financial statements.The case study shows that if the purchase cycle structure ABS wants to Off-Balance-Sheet the key is don't merge special purpose entities,transfer the rights of continuing to buy,"fusing" mechanism,reasonable risk retention;Secondly,we should pay attention to the special risks of the cycle structure,including the risk of confusion,price risk and so on;Finally,this ABS of China Merchants Bank as a trial,did not touch the core of the cycle of the purchase structure,"a trust set up repeatedly issued".