Study On The Legal Matters Of Risk-remote Mechanism Of Mortgage-backed Securitization

Mortgage-backed Securitization (hereinafter called as MBS) is an extremely innovative financing product, nowadays, with the large-scale growth in residential mortgage loan, its appearance alleviates fluid pressure of the commercial banks, raises the utilization rate of funds. It is advantageous for economy development of the entire society.The entire operation flow of MBS is very complex, and the risk-remote mechanism is the key of the operating process of MBS, it needs law's support and arrangement. Only if the risk-remote mechanism took effect, could investor's benefit be protected, the investor's confidence be heightened, so as to protect the effective operation of the capital market.This article is mainly carries on the legal analysis to the risk-remote mechanism of MBS, discovers the main legal matter which the risk-remote mechanism faces in the operation, attempts to find the legal breakthrough point for the effective application of risk-remote mechanism in our country.The article is mainly divided into three parts: The first part, is mainly summarizing the risk-remote mechanism of MBS, elaborates the meaning of asset securitization and MBS, with the aim at knowing this financing tool, and expands to the operation flow of MBS, in order to understand the statue of risk-remote mechanism in the entire securitization process, and describe that the risk- remote mechanism is the core law characteristic of securitization in detail.The second part is the elaboration of two important steps of the risk-remote mechanism, includes the transfer of assets and the construction of special purpose vehicle (SPV), analyze the main legal matter which they faces with separately. For the part of the transfer of assets and the realization of true sale, discusses several transfer ways of assets firstly, analyze the problems which exist in these several transfer ways, proposes the principle of selection, points out that the final goal of the transfer of assets is to realize true sale, to prevent the risk of re-characterization, and branch out from this into the discussion of legal standards of true sale, considering there are various standards among countries towards the true sale, take the U.S.(where MBS most mature developed)for example, summarizes several basic legal standards of the true sale. Regarding the construction of special purpose vehicle (SPV), firstly, introduces the forms of SPV, namely the company form, the trust form and the limited partnership form, compares the superiority and inferiority of these three forms, talks over several bankrupt-remote situations, including being isolated with bankruptcy risk of the initiator, SPV itself and other participants in the securitization, and then put forwards the corresponding suggestions and measures.The third part, discusses the practice situation of risk-remote mechanism in our country. From the view angle of the MBS product which published by the China Construction Bank, Overview the fundamental flow of the MBS in our country and the basic mode of realizing risk-remote mechanism, then elaborate corresponding legal basis. Afterwards on the basis of the laws which involves in the present securitization operation, evaluates the related provision, points out the potential factors that do not benefit for the risk- remote mechanism, and suggest that makes the corresponding supplement revision to the present laws and regulations, builds a proper legal base for the healthy development of MBS.