Case Study on Facilitating Securitization:
The Japan Securities Dealers Association (JSDA) announced in March 2009 that its members “shall establish procedures to properly communicate information to their customers, who are investors, regarding details and risks (including risk not communicated in the credit rating) of the underlying assets, etc. of the securitized products they distribute (or following the distribution of said securitized products).
Securitization began in Japan in 1990s as part of the global trend to manage credit risk and tap new sources of investment funds. Growth, however, was initially stymied by a lack of legal framework for securitization. First, perfecting the transfer of assets in Japan was costly. “Perfection of transferring loans and receivable requires notarial certification of individual loans and receivables one by one.” A second cost issue was the expense of establishing an SPV..
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