Recently, Chinese Min Min Bank issued the Measures for the Unified Registration of Movable Property and Rights Security (hereinafter referred to as the Measures), which came into effect on February 1, 2022, and the Measures for the Registration of Pledges of Accounts Receivable (order [2019] No. 4 of the Chinese Min Min Bank) were abolished at the same time.
The Measures make it clear that the parties shall handle the registration independently through the unified registration system, and the general description of the secured property shall be able to reasonably identify the secured property, and be responsible for the authenticity, completeness and legality of the registration content, and the central bank's credit information center shall not conduct a substantive review of the registration content.
The central bank said that the Measures further clarify the scope, registration agency and responsibilities of the unified registration of movable property and rights security, refine the content of registration, optimize the registration and inquiry operation process, and better guide market entities to standardize the registration and inquiry of movable property and rights security activities, further improve the efficiency of movable property and rights security financing, and optimize the business environment.
The financialization of art has been developing in western finance for a long time. Art investment, stock investment, and real estate investment are known as the three major investments of enterprises and households, generally accounting for 5%-25% of the total assets of enterprises and households. Investing in art is both risk-resistant and has considerable appreciation space.
There are also several main forms of art financialization: auction, securities, insurance, trust, fund, pawn, pledge.
Previously, the situation in the domestic art financial market was that there were operational difficulties in the operation of auction, pawning and pledge, especially in the process of appraisal, valuation, custody and realization of artworks.
With the continuous expansion of China's art trading market, in recent years, with the help of financial tools and means, art is being rapidly financialized in various ways, art banks, art funds and trust investments, art mortgages and mortgages, art property rights transactions, art securitization transactions... Art is an "asset" that is gradually gaining popularity and recognition.
The Measures for the Registration of Movable Property Mortgages, which came into effect on 20 April 2019, make art one of the legally mortgaged movable property after real estate, stock finance, automobiles, gold jewelry, and art works become veritable assets.
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Subsequently, the registration of movable art was attempted throughout the country. Beijing became the first pilot city in China to carry out a unified registration system for movable property guarantees; since then, an art center in Shanghai has taken the lead in exploring and establishing an art registration and certification system in the country, and the Shanghai Intellectual Property Park has issued genuine "identity cards" after multi-procedure and multi-element registration and confirmation of works and artists. Shaanxi has set up the Shaanxi Cultural and Artistic Works Judicial Appraisal Center for the registration of works of art and cultural relics and antiques, which is a professional appraisal institution approved by the Shaanxi Provincial Department of Justice and filed by the Ministry of Justice of the People's Republic of China to carry out the judicial appraisal of cultural artworks for the society. Shenzhen, Zhengzhou, Luoyang, Taiyuan and other cities have also piloted the registration of movable property of cultural and artistic works, the purpose of which is to open up the way to monetize according to the needs of the market situation.
From the judicial appraisal of works of art to the registration of movable art in various places, and then to the promulgation of the "Measures for the Unified Registration of Movable Property and Rights Guarantees", it can be seen that the government's determination to financialize the art market also means that the collection and sale of art works will enter a new stage.