Research On Related Legal Issues Of Asset Securitization

Asset securitization is a legal mechanism about investing and financing. The originator(financier), special purpose vehicle and investors are the necessary parts of this mechanism. In practice, the originator finance by the way of removing specific assets and getting the price, the special purpose vehicle who gets this specific assets issues securities to attract investment on the base of this part of assets. As a financial innovation, financing is the standard function of asset securitization. Due to the particular way of financing, it objectively also has the effect of transferring the risk. The2008US financial crisis’s root is the abuse of "risk transferring" function. This paper hopes to use empirical research method, to explore the related law issues of securitization by analyzing "Ali Small Loans" securitization mode, and puts up the idea on how to improve the institutional environment of securitization, in operation and supervision.Asset securitization has two types of pilot in our country:the "credit asset securitization" and the "corporate asset securitization". These two types of securitization are created by the management pattern of the financial sector, which build up two different kinds of securitization."Ali Small Loans" securitization mode is a typical representative of the "corporate asset securitization", which is also an important point for legal analysis about asset securitization.The first chapter of this paper is an overview of asset securitization. Asset securitization is a financial community dominated field of study, the author hope to interpret securitization in legal perspective, trying to summing up the legal definition of it and introducing the spiritual core of asset securitization——asset credit. Asset securitization can be summarized as a set of legal relationships about investment and financing: the originator transfers its creditor’s rights to the special purpose vehicle by some legal forms aiming to risk isolation; the realization of asset credit provides the basis for special purpose vehicle to issue securities.Asset securitization should be based on asset credit, the running and regulation of it should be closely around asset credit. Then, this part also introduces the different forms of asset securitization practice at home and abroad, different forms of securitization with the different special purpose vehicles, company, limited partnership, trust, etc.Then, the second chapter analyses the "Ali Small Loans" asset securitization mode, looking for its legal relations built in the process of securitization. This chapter expounds "risk isolation" and "credit enhancement" legal mechanism of the "Ali mode"."Ali Small Loans" transfers the credit assets to the "special plan", achieving risk isolation. Risk is mainly refers to the bankruptcy risk of "Ali Small Loans"."Credit enhancement" refers to the efforts to improve the securitized products’ credit quality. There are two ways for credit enhancement in "Ali mode", inside and outside. Finally, this part also describes the issuance and trading of securitized products of "Ali model".The third chapter puts forward the legal issues associated with asset securitization on the basis of the analysis about "Ali Small Loans" securitization mode, mainly about the design of "special purpose vehicle", the realization of "risk isolation", the selection of "quasi securitization asset", and the issuance and trading of securitized products, etc.Combined with the questions put forward, the author gives advices on how to perfect the institutional environment of asset securitization in chapter four, in operation and supervision. In operation, the author talked about some advices about institutional improvement on the design of special purpose vehicle, and on how to connect "risk isolation mechanism" with the "creditor’s rights transfer" system effectively, especially on how to ensure the "authenticity" and "stability" of transfer. In regulation, advices mainly refer to the improvement of the institutional environment under the condition of information asymmetry and the purples of financial risk prevention. The author expounds the idea on the establishment of the information disclosure system, also talks about some suggestions on preventing financial systemic risk.