Research On The Supervision Of Reits

Along with the rapid development of Real estate, some deep-rooted contradictions and problems of Real estate financing began to emerge. One of these problems is that the financing method of Real estate in China is sole, it relies highly on the banks, so the financing methods of Real estate in China should be diversified immediately. Accordingly, as a practicable financing approach, REITs draw the attentions of Real estate and financial industry, and get the nod of decision makers, REITs will come soon.Due to limited rational and information asymmetry, adverse selection and moral hazard spreads widely in the operation of REITs, and it leads to the frangibility of REITs. Theory and practice have shown that market mechanisms can not achieve the optimal choice, government regulation is important for the development of REITs.This paper systematically analysis the REITs regulation from the aspects of market access, business operation, risk control and market secession, referring these practice in United States, Japan and other countries and regions, and following the actual situation in China, we put forward our own ideas of regulatory system.This paper establishes the C-REITs market access criteria from the aspects of organization structure, shareholders structure and trustee qualification, and the result shows that trust planning is the optimal option of C-REITs structure, the shareholders should be diversified to certain degree, and the trustee qualification should be controlled strictly. As refer to business operation, this paper put forward the regulation idea from the aspects of collection method, manage model, the main source of investment and revenue, debt ratio, revenue allocation and other key issues. C-REITs will confront agent risk, organization management risk, property evaluation risk and other risk in operation, this paper put forward that we can control the C-REITs risk by supervision of information disclosure and classification and monitor the REITs operation entity. The Corporation Law and the Bankruptcy Law is applicable for market secession. The research result is valuable to the C-REITs regulation.