GHANA Law and Practice Contributed by: Adelaide Benneh Prempeh, Michelle Nana Yaa Essuman, David William Akuoko-Nyantakyi and Audrey Nana Oye Addy, B&P Associates
ing asset; however, an Asset Purchase Agree - ment may be considered in this context. To avoid transfer pricing issues, the consideration for the asset must be adequate and reflect its true value in accordance with the arm’s length principle. In other words, the transfer must reflect a true sale such that the prices of the assets should be simi - lar to what that would have been agreed upon by unrelated parties under similar circumstances. For example, in a valid asset transfer, the origi - nator must not retain control over the asset as if they were still the owner. In the absence of specific legislation, the SEC is open to accept - ing customised terms that effectively express The principal warranties that may be included in securitisation documentation are as follows. • A warranty that the originator holds perfect title to the asset and has the legal capacity to transfer it. • A warranty of full compliance with regulatory requirements and that the assets are not sub- ject to any tax claims, penalties, or regulatory fines that could arise after the sale. the concept of securitisation. 3.2 Principal Warranties • A warranty that the originator is not insolvent or in danger of insolvency proceedings that could affect the validity of the asset transfer to the Special Purpose Entity (SPE). • A warranty that the asset is free from any encumbrances. • Any other specific warranties that the parties may wish to include. To address the enforcement of these warranties, parties may incorporate a clause that allows the SPE to be indemnified in the event of a breach. Typically, the parties also include a dispute res - olution clause, providing the aggrieved party
with a mechanism to remedy any breach of the agreement’s terms. 3.3 Principal Perfection Provisions Perfection is dependent on the nature of the asset being transferred. Generally, key perfec - tion provisions that may be included include the delivery of title documents to the transferee, as well as provisions for filing changes in title with the relevant regulatory authorities. 3.4 Principal Covenants As mentioned, the nature of the agreement largely depends on the type of financial asset involved. However, with regard to covenants, the parties will include provisions outlining each party’s obligations. These provisions typically address payment obligations, delivery mecha - nisms, required notices, reporting duties, col - lateral obligations (if applicable), and any other covenants permitted by the SEC. In terms of enforcement, the dispute resolution clause will outline the agreed-upon process for making claims. 3.5 Principal Servicing Provisions These provisions outline the servicer’s obliga - tions, including reporting requirements, notices, and the information to be provided. It may also specify timelines for the delivery of the required reports. 3.6 Principal Defaults Defaults in securitisation documentation may manifest in the following forms. • General defaults by parties – this occurs when there is a breach of the agreement or a violation of specific events of default, such as the insolvency of the SPE. This may trigger a
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