China Banking and Insurance Regulatory Commission: Follow Up Questions

Main Takeaway

The China Banking and Insurance Regulatory Commission (CBIRC) sought SFA and its members to better understanding how securitization works in the U.S. SFA CEO Michael Bright met in Beijing with the CBIRC to discuss securitization in China. SFA received and responded to 10 foundation-building questions from the CBIRC. SFA’s China Market Development Task Force looks forward to continued productive engagement with China’s regulatory community as their securitization market continues to develop. Read SFA’s response to the CBIRC here.

Background

Since 2013, China has been developing a massive liquid securitization system, rapidly becoming the second largest market in the world by total value of outstanding securitization notes. Most Chinese bonds have been issued by mainland firms for mainland investors. However, the internationalization of the Chinese securitization market has already begun and in our globally connected economy, understanding global best practices in securitization is crucial.

At SFA, we have built relationships not only with our trade association counterparts in China, but also with Chinese regulators and financial institutions to promote increased bilateral communication. In this 10-question Q&A exchange with the CBIRC, SFA provided information on a broad range of topics including global efforts to reduce reliance on IBORs, ESG investing, and bankruptcy remoteness in China’s Asset Backed Specific Plan compared to ABS in the U.S.