Research on the Legal Structure and Effect of Assignment Security

In practice, given that statutory security devices are often insufficient to fully protect the interests of obligees, contracting parties have increasingly resorted to creating contractual arrangements with security functions to mitigate the risk of creditor losses. Among these non-typical security devices, the security transfer has emerged as a particularly efficient and cost-effective mechanism. In recent years, its role in market transactions has become increasingly prominent, and its use in judicial practice has grown significantly. However, the Civil Code and related judicial interpretations lack clear provisions on several contentious issues surrounding security transfers, including their legal nature, validity, potential violation of the numerus clausus principle in property law, and methods of public notice. Against this backdrop, this paper examines these unresolved questions by analyzing Article 388(1) of the Book on Real Rights in the Civil Code, Article 23 of the Judicial Interpretation on Private Lending, and Article 68 of the Judicial Interpretation on Security Systems, while also considering the current state of judicial practice in China.