Kunlun Trust Development Research Weekly Information No. 170

Spotlight

Asset-backed securities business development

Asset securitization business is one of the paths for trust companies to transform their professional practice management institutions. Since they do not take risks, and can provide facilities such as asset-out-table, low-cost financing and public offering and distribution, they are regarded as a new blue ocean for the development of trust companies' businesses . In fact, apart from the traditional securitization of bank credit assets, trust companies should pay attention to other three types of asset securitization businesses, including the securities securitization of securities firms led by the Securities and Futures Commission, the asset-backed bills led by the Dealers Association (ABN) and private placement of asset securitization products.

First, the bank credit assets and securities business

The initiators of credit asset securitization are mainly financial enterprises such as policy banks, commercial banks, financial leasing companies, automobile finance companies and asset management companies, and the trust companies are currently the statutory trustees. The bank credit assets securitization business started in 2005. The Central Bank and the China Banking Regulatory Commission released Measures for the Pilot Management of Credit Assets Securitization and Measures for the Supervision and Administration of Pilot Projects for the Securitization of Credit Assets of Financial Institutions, opening a pilot program for the domestic securitization of credit assets. The approval system for credit asset securitization needs to be approved by the central bank and the CBRC at the same time. Subsequently, China Development Bank and China Construction Bank issued two tranches of asset-backed securities respectively in the inter-bank market. By 2006, a total of RMB12.926 billion of credit asset securitization products were issued in the inter-bank market. However, by 2007, due to the financial crisis, the central bank and the China Banking Regulatory Commission suspended the approval of credit assets and securities businesses. In 2012, the three ministries jointly issued the "Notice of the People's Bank of China, China Banking Regulatory Commission and the Ministry of Finance on Relevant Issues on Further Expanding Pilot Projects for Securitization of Credit Assets," and restarted asset securitization. In July 2013, the General Office of the State Council promulgated the Guiding Opinions on Adjusting, Upgrading and Upgrading the Economic Structure of Financial Support, and clearly proposed that credit asset securitization should be gradually promoted in a normalized manner. In 2014, PAB issued 3 billion credit asset securitization products and issued it for the first time on the stock exchange market, breaking the barriers that banks' credit asset securitization businesses can only publish in the interbank market and greatly expanding their assets and assets Securities issuance and trading space.

The demand for securitization of bank credit assets can help banks to show their credit assets. For most banks, credit assets can be leveraged to improve their asset and liability structure. Therefore, there is a great demand. At the same time, credit asset securitization business can also cooperate with other lending institutions, such as auto finance companies and consumer lending companies. These types of lending service institutions need to securitize their credit assets due to the limitation of capital so as to be able to return capital and increase Its operating leverage. As of May 2014, the balance of domestic RMB loans was 76.6 trillion yuan while the amount of custody of asset-backed securities registered in the China Debts Board was 96.257 billion yuan, while the proportion of credit asset securitization in credit assets was only 0.13%. The market space huge.

Second, corporate asset securitization business

The main financing of corporate asset securitization is non-financial enterprises, of which the SPV by the capital management plan as a broker. In 2004, the CSRC promulgated the "Provisional Measures for the Management of Client Assets of Securities Companies" and the "Circular on Relevant Issues Concerning the Conducting of Collective Assets Management Business by Securities Companies", starting the business of asset securitization. By 2006, a total of 9 single brokerage special assets Management plan, raised 26 billion yuan of funds. As a result of the financial crisis, the CSRC suspended its corporate asset securitization business and released the Guidelines for Piloting Enterprise Asset Securitization Business (Draft for Comment) and arranged a research team to research and prove it. In March 2013, the CSRC formally released the Provisions on the Administration of Asset-backed Securities Business of Securities Companies to restart the business of asset securitization. However, the broker's asset management plan can not really achieve the trust's bankruptcy isolation function. In February 2014, the SFC suspended the examination and approval of special investment business of brokerage firms. As a result, the securitization of brokerage assets was at a standstill. At present, there are some existing ones that have been accepted by the Securities and Futures Commission earlier.

Securities and Securitization new rules expected to be introduced in October this year, the main changes include: securities companies will implement the "record-keeping system", the implementation of the underlying assets of the negative list management, the main business scope from securities companies to fund subsidiaries. The development of asset securitization business, which takes the securities asset management business as the main body, faces more than 5 trillion market space. Due to the classified regulation of China's financial industry, the trust companies affiliated to the CBRC system can not directly participate in the securitization of securities firms for a while. However, the asset securitization of enterprises is undoubtedly a new blue ocean in the future. It is very easy for trust companies to stare at the credit asset securitization business Plunged into vicious competition. Therefore, it is necessary for the trust companies to prepare ahead of time and wait for the gatekeeper of the policy. Second, they can work together as financial consultants, joint brokers or fund subsidiaries.

Third, asset-backed bills business

Strictly speaking, asset-backed bills (ABNs) are not the same in nature as the commonly used ABS in the world and can only be called "asset-backed securities". ABS should have the basic characteristics of risk isolation. It needs to realize the "real sale" of underlying assets through the establishment of SPV with bankruptcy isolation so as to effectively protect the interests of securities holders. In the Guidelines for Asset-backed Notes of Non-financial Enterprises in the Inter-bank Bond Market released by the Association of Traders, there is no strict risk isolation requirement for asset-backed bills. At the same time, the current issue of ABN products also did not explicitly set the risk isolation, there is no establishment of SPV, its nature and set the receivables pledged more close to the general credit bonds, that is, the cash flow of the underlying assets enjoy priority to compensation, and Issuer has recourse.

In August 2012, the Interbank Market Association released the Guidance Notes on Asset-Backed Notes for Non-Financial Enterprises in the Inter-bank Bond Market, and the asset-backed bills were registered. By June 2014, the dealer associations registered a total of 14 ABN products and raised a total of RMB14.6 billion. At present, mainly some government investment and financing platform companies issue ABN products. It is reported that Beijing Trust and other companies have been actively operating in preparation for the recent launch of trust ABN products in the interbank market. Trust-based ABN enables trust companies to transform their original non-standardized trust products into standardized products through the channels of the Inter-bank Dealers Association and then transfer them in the inter-bank market to increase the liquidity of the trust company's products. Trust-based ABN products once issued a success, for the trust company, is definitely a major positive.

Fourth, private placement of asset-backed securities

In China, the above three types of business are open market businesses. In fact, private placement of asset securitization products is also a big market area. Public offerings Securitized products require sophisticated rating agencies and institutional investors who are well aware of such investment targets, both of which are difficult to complete in the near term. On the contrary, private equity markets can take higher risks and uncertainties for higher returns. In the United States, the private placement of securitized products in 2012 accounted for 43% of the total circulation for the year. In China, we have reason to believe that private equity ABS market will be faster and faster development. For example, the establishment of financial assets around the exchange is a good platform for private placement of asset securitization products trading platform. Trust companies can make full use of their existing client resources to migrate their experience in asset acquisition, product packaging and risk management accumulated in traditional projects to asset-backed securities securitization projects, grasping this high-growth field Development opportunities.

Macro situation

Li Keqiang: The only "strong stimulus" is to strongly promote the reform

At the State Council executive meeting held on August 27, Premier Li Keqiang responded to the argument that the economy was "strongly stimulated" by the outside world. The economic data improved in the first half of this year. However, in fact, the monetary policy has not loosened at all. The only "stimulus" is the strong promotion reform. Li Keqiang said the old saying that the economy is under downward pressure and investment growth is declining due to insufficient domestic demand, but in fact, there are still many needs of 1.3 billion Chinese that have not been adequately supplied. To dig out these needs, we need to supply and guide the release of the potential demand. He also said that all construction projects should be prevented from duplication of construction and construction of comparative advantages as well as deepening various institutional reforms in investment and financing. We must continue "to maintain our strength and make a difference" and use the reform method to promote making up the shortfall, adjusting structure and benefiting people's livelihood.

Lou Jiwei: Allowing local bonds to replace high-cost financing stock debt

Lou Jiwei, minister of the Ministry of Finance, pointed out in his speech at the NPC Standing Committee meeting that the system of spontaneous self-return of local government bonds should be perfected and a local government debt financing mechanism with government bonds as the main body should be established. For high-cost financing stock debt, allow local governments to apply for the issuance of local government bond replacement, reduce the interest burden and optimize the term structure. Lou Jiwei also said that the divestiture of financing platform for corporate government financing functions. The local government debt limit control, strict control of new debt, the local government debt into the budget management, the establishment of debt risk warning and emergency response mechanism. Promote the use of government and social capital cooperation model and encourage social capital to participate in urban infrastructure investment and operation through franchising and other means.

Homeland officials: real estate registration information in 2017 public inquiry

On the afternoon of August 27, Leng Hongzhi, executive deputy director of the Real Estate Registration Bureau of the Ministry of Land and Resources, said that in 2014, basically, the integration of responsibilities at all levels was completed and a basic system was established. In 2015, a sound supporting system was implemented in a smooth and orderly manner. , The normal and effective operation of 2017 to achieve information sharing, public inquiry according to law. The precondition for all the above work is the unification of the registration agencies at all levels and the absence of a unified agency for the society. Uniform registration of real estate can not be mentioned. At the national level, focusing on the "three unifications" of register books, registration bases and information platforms, it is necessary to do well the top-level design as well as to coordinate and promote them as a whole. At the local level, it is necessary to first strive to complete the integration of registration responsibilities before the end of this year according to the relevant state requirements and, on the basis of this, form a unified body to carry out the transfer of data at all levels, system docking and work connection, and actively and steadily implement the unification of real estate Registration system.

SAFE: Newly approved QFII quota of 1.776 billion U.S. dollars in August

According to the latest data released by the State Administration of Foreign Exchange, on August 26, 254 QFII (qualified overseas institutional investors) have approved a total investment amount of 59.674 billion U.S. dollars, with the newly approved amount of August 1.1776 billion U.S. dollars, of which 2 Institution approved for the first time. The two new institutions are respectively Wharton Securities Investment Trust Co., Ltd., GF International Asset Management Co., Ltd.

The central bank to carry out 10 billion 14 days are repurchase, net weekly invested 45 billion yuan

On Thursday, the central bank openly continued to carry out a 14-day repurchase operation of 10 billion yuan today, with the winning bid rate unchanged at 3.7%. There will be 65 billion yuan repurchase due in the open market this week, of which 35 billion yuan will expire on Tuesday and 30 billion yuan will expire on Thursday. Therefore, a one-week net release of 45 billion yuan was the third consecutive week of net delivery. Last week, the central bank conducted a total of 40 billion yuan 14 days of repurchase in the open market. A total of 50 billion yuan repurchased and 1 billion yuan worth of central bank bills expire with a net investment of 11 billion yuan. In addition, the Ministry of Finance and the People's Bank of China also conducted the tendering of time deposits (nine issues) with the Central Treasury cash management commercial bank in 2014 through the deposit-taking system of cash management commercial banks of the Central Treasury of the People's Bank of China on the morning of Thursday with an operation volume of 60 billion yuan , The period of 3 months.

Industry News

CNAC Trust: Initiation of the First Trilateral Cooperation in Small Domestic Trust Insurance Loans

The signing ceremony of "China Life Insurance, AVIC Trust and Credit Insurance Credit Cooperative Signing Conference" was held in Beijing a few days ago to launch the first trilateral cooperation in insurance, trust and microfinance in China. The tripartite cooperation by Yixin as an insured person, on the series of trust plans issued by AVIC trust loans to the country life insurance insured financial institutions credit insurance losses, the insured is the Air China Trust; trust plans borrowers overdue repayments , PICC Life Insurance will pay the corresponding compensation according to the conditions stipulated in the tripartite cooperation agreement and the compensation limit. This credit insurance policy, in coordination with the original "prioritized / inferior structured design" and other credit enhancement measures, will achieve multiple Increase the letter of the effect, so as to further protect the trust plan priority principal principal and proceeds of the safety.

Ping An Trust launched a limited partnership docking hedge funds overseas

In August of this year, Ping An Trust launched Limited Partnership Products "Hai Hui Yuan Sheng" and plans to raise 300 million yuan to invest overseas hedge funds. Investors in the form of RMB investment, but eventually the principal and proceeds will be settled in the form of US dollar exit, the investment period is tentatively set for 1 year and 4 months, the investment target for the Sound Point credit opportunities offshore fund. The detailed transaction arrangement is that Ping An Decheng Investment Co., Ltd., as General Partner (GP), initiated the establishment of Hai Hui Yuan Sheng Audio Partners Limited Partnership with the registered address in the Cayman Islands in order to evade overseas tax burden and to make asset independence Operational arrangements. Ping An Decheng Investment Co., Ltd. is a wholly-owned subsidiary of Ping An Trust Ping An Innovation Capital held by 99% of the holding; domestic investors as the sea exchange yuan investor (LP). After a series of trading arrangements, the funds of LP are exchanged for the U.S. dollar to go to sea and the funds are re-routed through a special carrier (SPV) for overseas investment. Eventually, the overseas designated funds will be indirectly invested through the exchange rate of Hai Hui Yuan. The product requires that investors non-Americans, individual investors have a net investment of not less than 5 million US dollars of net assets, institutional investors own and investment in the net assets of not less than 25 million US dollars; % Of front-end project setup fee. In addition, Ping An Trust, through its overseas affiliates, provides services and receives a basic service fee of 1% per annum for its overseas affiliates, plus an additional service fee of 5% for the added-value part of the fee, Property commitment.

Baidu together with China Film Group, CITIC Trust into the crowdfunding

In April this year, Baidu crowdfunding platform has finally been announced. Baidu, CITIC Trust and China Film Group have reached strategic cooperation in the financial crowdfunding platform for the film culture industry. The first landing on the platform includes Director Xu Anhua and Tang Wei's "Golden Age" starring Zhao Wei and "Love in a Brilliant Future" to us. Crowdfunding projects will be carried out in three phases: filming, advertising and watching movies. Financial institutions will have participation in all three phases. For the investment promotion phase of the project, the risk of the entire investment is smaller. The specific mode of operation will change the way of advertising in the past, claiming that for a projected 500 million box office movie, 50 million may be required for outreach. Crowdfunding is through the threshold of a movie ticket money to attract millions of users to invest, the specific mode of operation is to declare made "movie tickets pre-sale plus investment management" mode.