The Bankruptcy Remoteness Of Enterprise Asset Securitization

The key to prevent assert securitization of enterprise from bankruptcy risk lies in the construction of "Bankruptcy-Remote”,which is one king of Special Purpose Vehicle(SPV).The basis of bankruptcy remoteness includes two aspects: one is that the asset transfer must meet the criteria of true sale;the other is that the structure of SPV can truly achieve bankruptcy remoteness.To grasp the particularity of bankruptcy remoteness in asset securitization of Chinese enterprises,it mainly focuses on the SPV with Chinese characteristics--Special Assert Support Plan.The main reasons lie in the low legal effect of the normative documents related to asset securitization of enterprises,and the lack of independence of the special plan,which are likely to lead to the failure of bankruptcy remoteness.In the process of enterprise asset securitization,the relationship between the special plan which is responsible for the role of SPV and the participants of enterprise asset securitization is complex,which implies many legal risks and transaction risks,and those problems pose a realistic challenge to the realization of bankruptcy remoteness.As an imported product,the asset securitization has inherent true sale risks,including re-characterization risk,revocable transaction risk,fraudulent transaction risk and substantial merger risk.After entering China,under the normative background of the Bankruptcy Law,we have to concern about special plan risk as well,which is a key element to prevent bankruptcy remoteness from risks in China.To put it more precisely,those risks include such as unclear legal attributes and vague legal relations,it is vulnerable for enterprise to be affected by insolvent parties,especially those parties have business relationships with each other.Among them,it is worth for enterprise to pay attention to the implied risks derived from some special arrangements during the process of enterprise asset securitization transaction,such as replacement and repurchase,retention of surplus interests and risk self-retention,and investor selection,etc.These are the unfavorable factors that may affect the achievement of bankruptcy remoteness of enterprise asset securitization.The first part of this paper analyzes the special transaction structure constructed for the structural financing in the securitization of enterprise assets and the role arrangement in the transaction process,consequently,this part demonstrates the important relationships between SPV and other factors which may have enormous effect on achieving bankruptcy remoteness.All these matters are worth of our attention.The second part of this paper mainly starts analyzing and discussing the three key elements related to "bankruptcy remoteness" in the process of enterprise asset securitization,namely,"asset support special plan(SPV)","underlying assets" and "true sale".By doing this,this paper find out the system construction basis for the realization of bankruptcy remoteness and make good preparation for the subsequent risk regulation and rule improvement.The third part of this paper: the main intention is to find out the specific content of the "bankruptcy remoteness" of enterprise asset securitization.This part mainly analyzes "the source of the bankruptcy remoteness risk with the original stakeholders,managers and holders of asset-backed securities".Combined with the theories in the first two parts,it discusses the bankruptcy risk that may occur in the practice of enterprise asset securitization.The fourth part of this paper: according to the problems illustrated and analyzed in the first three parts,the author thinks about the institutional norms and improvement suggestions on "the bankruptcy remoteness between the original stakeholders,managers and holders of asset-backed securities",and analyzes the special risks in the enterprise asset securitization transaction arrangement,and combines the domestic practice and foreign(mainly in the United States)experience to institutionalize and improve the measures to deal with relevant risks,including the introduction,modification and improvement of some old and new systems and rules,such as clearance repurchase,risk self-retention,information disclosure,qualified investor penetration verification and so on.In short,to achieve "the bankruptcy remoteness of enterprise asset securitization",the first goal of construction is to achieve the bankruptcy remoteness between the SPV and the original stakeholders,which is the so-called "bankruptcy remoteness in a narrow sense".First,it is necessary to standardize the legal attributes of the special plan(SPV),clarify its relevant legal relations,and guarantee its independence.Secondly,to achieve the bankruptcy remoteness of enterprise asset securitization,it is also necessary to take into account the bankruptcy remoteness between the SPV,the program manager and the holders of asset-backed securities,so as to build a more comprehensive bankruptcy remoteness system.Finally,only when the market subjects of enterprise asset securitization are honest and self-disciplined,and the regulators conduct coordinated supervision "in advance,in the course and afterwards ",and at the same time,the risk awareness and risk prevention ability of investors are educated and improved,can the enterprise asset securitization in China develop in a more healthy and mature way.