In addition to traditional capital financing, security trusts have been increasingly utilized in recent years. In a security trust, the entrusted asset, which is separate from the property of the settlor, is treated as an independent unit of property and is not affected by the insolvency of the trustee as well as the bankruptcy of the settlor. Thus, the settlor, who is granted a beneficial interest in the entrusted asset, can satisfy its claims directly from the asset regardless of whether an insolvency proceeding has been commenced or not. However, while the protection of the entrusted asset from the insolvency of the trustee is a typical bankruptcy remoteness effect, the protection of the asset from the insolvency of the settlor is not related to bankruptcy remoteness directly. This is because it should be viewed as a consequence of the settlor’s transfer of its property to a third party and the legal act that caused the transfer was only by chance a trust contract. This is even more evident when examining the legal relationship of a Special Purpose Company (SPC), which has a similar structure to a security trust. For example, the legal relationships surrounding a Bare Boat Charter Hire and Purchase (BBCHP), a typical example of an SPC-related contract, have nothing to do with a trust contract, yet the vessel owned by the SPC is protected from the insolvency of the shipping company using it. Considering that the vessel has been owned by the SPC from the beginning, it is reasonable to conclude that the insulation effect should be stronger than that of the entrusted asset, which is initially the property of the settlor and is only transferred to the trustee through a trust contract and can be returned to the settlor upon termination of the trust contract. Therefore, it is natural to view the bankruptcy remoteness as an effect of how the parties organize their legal relationships rather than the exclusive characteristic of the trust itself. On the other hand, the treatment of security trusts in insolvency practice shows that the bankruptcy remoteness effect does not have a significant impact on practice. The practice allows the beneficiary to lodge the receivables (e.g., loan receivables) under the basic contract with the settlor in the insolvency proceedings of the settlor. Interestingly, the plan actually treats the beneficiary as a secured creditor, even though the beneficiary’s receivables are not secured by any assets. In the plan, the beneficiary shall be paid first from the entrusted asset and only the remaining balance is reimbursed under the plan, which treats the asset as collateral evidently. However, it should be noted that this content can only be established with the beneficiary's consent. The key point seems to be the treatment of the preferred beneficiary’s right as opposed to the loan receivables. Those who are in favor of bankruptcy remoteness want to protect the preferred beneficiary’s right from any insolvency proceedings of interested parties, while those who oppose bankruptcy remoteness focus on the unreasonableness of treating the beneficiary, who is substantially the same person as secured creditor, differently simply because there is a trust contract. It would be logical for the preferred beneficiary’s right not to be affected by settlor’s insolvency proceedings, considering the definition of the right and the party against whom the right is exercised. However, given that the entrusted asset is already treated as collateral in the plan and beneficiaries are recognized as having a status similar to that of secured creditors, it is also worth considering treating the preferred beneficiary’s right as being bound by the insolvency proceedings for the settlor. I look forward to further discussions on this issue in the future.