China issued a notice on May 17, 2012, jointly promulgated by the People’s Bank of China (PBC), the China Banking Regulatory Commission (CBRC) and the Ministry of Finance (the Notice), re-launching its pilot securitization program. This DechertOnPoint provides a brief overview of the relaunched pilot program and updates our April DechertOnPoint anticipating the program’s planned rollout.

The Notice marks a milestone in the development of asset-backed securitization in the country. Specifically, it allows qualified and approved financial institutions to once again issue asset-backed securities, since a similar program was suspended during the global financial crisis in 2008. The first phase of the new pilot program is expected to involve up to $7.9 billion of securitized assets.