Chinese regulators are planning to broaden the investor base for securitization by allowing insurance companies to participate, something that current legislation makes no allowances for. With assets of roughly Rmb1 trillion ($124 billion) under management, insurance companies could potentially be huge ABS investors.

However, Chinese insurance companies are subject to strict investment guidelines, having only recently won the battle to invest in stocks. The China Insurance Regulatory Commission, an industry watchdog, and several of the country's biggest insurers are lobbying the powers that be in Beijing to do the same with ABS, although it is unclear what percentage of funds insurers could invest in this sector.

While this is undoubtedly an important issue, of more immediate concern is getting regulatory consensus tax treatment for securitizations.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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