A Study on the Securitization of Private Participation in Public Infrastructure Projects

• Main Authors: Chang-Chi, Yeh, 葉張基
• Other Authors: 王志誠 教授
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/68296665302571969911

博士 === 國立中正大學 === 法律學研究所 === 101 === Abstract In the wake of the deregulation of the inclusion of real property development projects under the Real Estate Securitization Statute, REITs, which are prohibited from public offerings, may be included in public projects for private participation (hereinafter referred to as private participation projects), urban renewal and public construction projects approved by the competent authority at the national level. This is the time for the co-existence of the “private participation in public infrastructure projects” and “Securitization of real estate”. The “private participation in public infrastructure projects” and the “securitization of real estate” and “securitization of financial assets” are regulated by a large structure. Each of the aforementioned systems entails multiple parties of stakeholders and a diversity of rights and obligations. Under this precondition, the intermingling of the “private participation in public infrastructure projects and securitization of real estate” and “private participation in public infrastructure projects and securitization of financial assets” will have a profound influence. The rights and obligations will be complicated and overlapping, and the allocation of related risks will be crucial. In the introduction of Chapter I, the concept of this paper is highlighted, including the methods and scope of the research and a review of the literatures at home and abroad. In Chapter II, a feasibility study on the securitization of enterprises in the “private sector” (including the securitization of real estate and financial assets) will be conducted. In Chapter III, a feasibility study of “The Entity” in securitization (limited to the securitization of financial assets and the securitization of real estate) will also be conducted. A comparison and analysis will be done on the quality, necessity and feasibility of securitization. The details of securitization between the private sector and The Entity will also be compared. A qualitative analysis on the securitization contract will be discussed in Chapter IV. In addition, this chapter also covers the securitization of the private participation projects (including real estate investment trusts, or REITs, and real estate assets trusts or REATs) or the securitization of financial assets (including special purpose trusts and special purpose companies) and the legal relationships among the stakeholders, with their rights and obligations further clarified. In Chapter V, legislation of the securitization of assets and experience in other countries, including the USA, Japan and China, will be considered as examples for our legislation. A study on the legislation of private participation projects in the UK, USA, Japan, and China will also be conducted for comparison with the legal rules currently in effect in Taiwan. In Chapter VI, a study on the restrictions of the securitization of real estate by enterprises in the private sector under applicable laws will be conducted. The restrictions and exclusions of the securitization of real estate in private participation projects (including development projects) will be analyzed. In addition, other applicable laws (The Encouragement of Private Participation in Public Projects Act, the Securities and Exchange Act, the Trust Act, the Trust Business Act, the National Properties Act, the Local Governments Public Properties Act, the Consumers Protection Act, the Financial Consumers Protection Act and the Land Tax Act) will be discussed in full detail in order to clarify the possible barriers under the laws to the securitization of real estate in the private sector and the procedure to securitize real estate under the due process of law. Likewise, Chapter VI in this paper will shed light on the legal barriers to securitization of financial assets launched by enterprises in the private sector or The Entity. The restrictions and exclusions of the securitization of financial assets in private participation projects will be analyzed. In addition, other applicable laws (The Encouragement of Private Participation in Public Projects Act, the Securities and Exchange Act, the Trust Act, the Trust Business Act, the National Properties Act, the Local Governments Public Properties Act, the Consumers Protection Act, the Financial Consumers Protection Act and the Company Act) will be discussed in full detail in order to clarify the possible barriers under the laws to the securitization of financial assets in the private sector and the procedure to securitize financial assets under the due process of law. In Chapter VIII, the review procedure for private participation projects in securitization of real estate or financial assets will be discussed. The controversy between the review procedure of the securitization of real estate and Article 51-2 of the Encouragement of Private Participation of Public Projects will be further analyzed. In Chapter IX, a study on the risks inherent to private participation projects and The Entity in securitization and preventive measures will be conducted, including: (I) legal risk (including 1. The risk of legal change, 2. The risk of policy change), (II) moral risk, (III) financial risk (including 1. Financial risk, 2. The joint and several liabilities to the damages to third parties, and 3. Bankruptcy risk), (IV) Risk of termination before maturity (including 1. The illegal operation of the trust firm in the securitization trust program, 2. The termination of the securitization program, 3. The termination of the agreement on private participation projects and the compensation distribution, 4. Mandatory takeover of operation, 5. The exercise of the rights of the stakeholder in intervention) and (V) Other risks (including 1. Administrative review procedure, 2. The settlement of disputes). The contents of these risks will be discussed in full detail with the proposal on preventive measures and strategies. Finally, a conclusion and discussion will be presented in Chapter X.