The Development And Innovation Of Structured Products In Chinese Securities Companies

The growth of China's securities industry has been constrained by the inefficient market system, resulting in low profitability and lack of competitiveness. This paper starts with theoretical analysis and elaboration on the nature of asset securitization, namely the repackaging of cash flows and structuring them into marketable securities generally accepted by third parties. By drawing upon the experience of well-known international investment banks in the design and development of structured products and taking into account the unique system environment and investors' demand, this paper then focuses on the feasibility study with respect to the development and innovation of structured product by Chinese securities companies, including mortgage backed securities, NPL backed securities and accounts receivable backed securities. This paper also provides the design process of a simple and general structured product, and offers examples of successful development of structured products in China. We believe the study of this paper will offer some crucial insights, both in theory and practice, into business and product innovations by Chinese securities companies and improving their profitability and international competitiveness.