Asset securitization in China: the latest and coolest

In April 2015 the People’s Bank of China (PBOC) relaxed its rules for the sale of mortgage and asset-backed securities – securities which are based on pools of underlying assets – allowing these products to be sold with limited approval from regulators. These assets are usually illiquid and long term, and pooling and securitization makes them available to a broad range of investors. When assets are securitized, the future cash flows of the assets are passed through to investors in the form of an asset-backed security and the most relevant to Chinese asset owners include commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS) and asset-backed securities (ABS).

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