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Securitization in China: China Banking Regulatory Commission widens the scope of ABS

 

August 27, 2013:

The Chinese Securities Regulatory Commission (CBRC) have been encouraging securitisation since 2005. A total of 66.78 billion Yuan ($10.47 billion) of ABS were sold in China between 2005 and 2008. However the global crisis of 2008, like in any other country, affected the economy of China as well. The CBRC took necessary steps whenever it found scope for improvement. In November 2012, the CBRC approved their first securitisation deal from a leasing company in China[1], since then there was no looking back. The Chinese Regulators went on expanding the scope of Securitisation/ABS to strengthen economy.

Recently the 21st Century Business Herald reported that a source close to the CBRC conveyed about its third round of pilot program for assets back security with about 200 billion Yuan ($32.66 billion).

It is expected that the ABS will trade on the Shanghai Stock Exchange (SSE) very soon. This shall provide additional opportunities to the investors as well and is also likely to increase the liquidity and off load the risky assets from the balance sheet.

China's next ABS issuance was scheduled for August 23, 2013, when the Export-Import Bank of China was set to offer 1.04 billion Yuan in ABS.

To read more on the China Regulations please click here: http://www.vinodkothari.com/secchina.htm

 

[Reported by: Pooja Rawal]

 
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