What Is a Trust Receipt?

Trust receipts are in accordance with the requirements of the Trust Receipts Law, in which the borrower holds inventory and the borrower sells the inventory on behalf of the borrower. This method of borrowing is widely used by car dealers, machinery and equipment dealers, and high-end consumer durables dealers. If an automobile manufacturer agrees to ship a batch of cars to a dealer, the dealer asks a financial company to pay for the car. After the dealer signed the trust receipt, which specifically stipulated the inventory handling method, as the guarantee agreement, the financial company paid the car to the car manufacturer. The dealer can sell the car, but the car must be repaid to the financial company. Trust inventory and liquid lien dominated inventory are different, the former must be identified one by one according to sequential numbers or by other methods. The financial company in this example would regularly check the cars stored at the dealership. The serial numbers of these cars must be checked against the car numbers listed on the warranty agreement. The purpose of the inspection was to find out whether the dealer's proceeds from the sale of the car had been handed over to the financial company. ^[1]

Trust receipt

The basic function of a trust receipt is to

Trust receipt

1.Enjoy at the bank

The first question is whether the developments and achievements that have been made are sustainable and stable.

Secondly, the wealth management market is heavily divided, and business competition is becoming increasingly fierce, and the orthodox business advantages of the trust industry will be difficult to sustain.

Finally, the lack of supporting regulations and trust systems and the "uniform" principle of supervision methods are still considered to be the bottlenecks and thresholds for trust innovation development.

After experiencing explosive growth in recent years, the subsequent development of the trust industry has attracted attention. The trust industry has entered an unprecedented situation of strategic transformation and rapid development, and has grown into an indispensable and important part of China's financial industry. However, there are also many hidden concerns in the development of the trust industry.

With changes in the market environment and policy orientation, how can trust institutions make use of their own asset management capabilities and institutional advantages, change trust management strategies in a timely manner, give full play to functional advantages, enrich new trust products, and improve investment and financing innovation services in economic structural adjustment The level will become a reality that trust institutions must now face: on the one hand, the huge amount of trust assets needs to be managed steadily, which will test the trust institution's ability to manage in the later period and the ability to buffer risks; In the context of China s economic growth, the cultivation of new business to drive incremental trust assets is also a realistic issue that attracts much attention.

In the past ten years, trust companies have justified their role as the "leaders" of China's asset management industry in accordance with the regulations and have accumulated rich management experience. However, due to the complicated subjective and objective reasons, trusts are more engaged in platform or channel business, and the core value of independent asset management has not been fully realized. Facing the fierce competition in the emerging asset management industry, whether the trust company industry can reflect more core core values with exclusive competitiveness in addition to the value of the license may be an issue that needs to be considered in its future asset management. .

Although the "Trust Law" establishes China's basic trust system, which has effectively protected the survival and development of China's trust industry at the legal level, it has many flaws due to its independence in trust property and the entry into force of trusts. The necessary legislative construction of supporting systems such as trust registration, trust tax system, trust business norms, and trust beneficiary rights transactions has not been followed up in a timely manner, which has greatly restricted the innovation and development of the trust industry.

In addition, there is no effect at the legal level or at the administrative regulations level of the State Council. Most trust companies are regulated in the form of departmental regulations. They belong to the business scope of the trust company industry, and it is difficult to resist similar institutions such as banks, securities, insurance, and funds. Prey.