Isolating Corporate Asset-based Securitization From Bankruptcy

As a result of separate supervision,Asset-backed Securitization in China is divided into two models as the credit asset securitization and the corporate asset securitization.The former has enjoyed a rapid development these years while the latter one,affected by the international financial crisis,didn't develop that well.We can see obvious shortcomings,especially the lack of bankruptcy remote,in the institutions of the corporate asset securitization.So,in this article,the bankruptcy remote of the corporate asset securitization is mainly discussed,with the problem of “True Sale” mostly concerned.The article includes five parts.The first part is about the basic concept and development of Asset-backed Securitization as well as the concept and legal elements of bankruptcy remote.The legal elements of bankruptcy remote including two main elements: a legally independent Special Purpose Vehicle(SPV)and the realization of “True Sale”.The second part was the start of a specific research on bankruptcy remote,beginning with the construction of an SPV.First,I will do an analysis on several major organization of the SPV.Then I will analyze the organization of SPV in our country,combined with the current situation.I find that the current organization of SPV in our country is not legally independent considering our civil law system.So I further analyze the feasibility of Special Purpose Corporate(SPC)and Special Purpose Trust(SPT).In the third part,I begin discussing the key question as the problem of “True Sale”.This part focused mainly on the identity of “True Sale”.There are quite a few theories about “True Sale” abroad,with which a basic standard of identifying “True Sale” may be concluded.The forth part will focus on the legal issues of “True Sale”.I will divide it into two parts: the first one is particularity of asset transfer under“True Sale” while the other one is about the “True Sale” of future claims.The final part is about the practice of “True Sale” of our country.In this part,I will first analyze the necessity of “True Sale” in the practice of Asset-based Securitization.After that,I will analyze the risk type of“True Sale” in the practice.Finally,I will make a conclusion on the regulatory view of “True Sale”.