JAPAN Law and Practice Contributed by: Hiroaki Takahashi, Kaoru Sato, Kenji Miyagawa and Koji Kawamura, Anderson Mori & Tomotsune
companies in the Cayman Islands were predom - inantly used for standard securitisation trans - actions. However, with the enactment of new laws (such as the Act Concerning Liquidation of Assets and the Act on General Incorporated Associations and General Incorporated Founda - tions) and the inclusion of GKs as a new type of corporation under the Companies Act, it has become standard practice to set up SPEs in the Subordination and cash reserves are often used as credit enhancement. In cases where an origi - nator retains subordinated portions of securitisa - tion products, or guarantees payments to own - ers thereof, a true sale issue will arise. 2. Roles and Responsibilities of the Parties 2.1 Issuers The issuer’s responsibilities are to originate and transfer their assets to SPEs. In most cases involving the securitisation of monetary claims, transferors and originators will continue to col - lect receivables and provide servicing of the securitised assets on behalf of the transferee SPEs. In real estate securitisation, they will also sometimes act as master lessees in respect of the assets that they have sold and leased back. That being said, the roles and responsibilities of transferors and originators vary, depending on the type of asset securitised. 2.2 Sponsors form of TMKs or GKs in Japan. 1.5 Material Forms of Credit Enhancement The term “sponsors” generally refers to “arrang - ers” who arrange securitisation transactions, or to the parents, affiliates or banks (including com -
mercial banks, investment banks, trust banks and securities companies) that provide origina - tors with financial support for the securitisation transaction. 2.3 Originators/Sellers Originators are securitising their assets by trans - ferring them to SPEs. With respect to securiti - sation of monetary claims, originators usually remain as servicers to collect funds on the securitised monetary claims. This is achieved through delegation by SPEs of collection func - tions to originators. 2.4 Underwriters and Placement Agents Underwriters and placement agents are essen - tially the parties who market and sell securitised products to investors. For regulatory purposes, underwriters ( hikiuke-nin ) are defined as persons who acquire securities ( yuka-shoken ) for the pur - pose of reselling them, or commit to acquiring securities that are unsold. Placement agents, however, are defined as persons who engage in brokerage activities or in the sale and pur - chase of securities in connection with the private placements or public offerings of securities pur - suant to the FIEA. Underwriters are subject to greater regulatory oversight, regardless of the kind of securitised product they deal with, because they shoulder the risk of having to acquire unsold securities. On the other hand, there are two categories of placement agents: • type I financial instruments business opera - tors ( dai-isshu-kinyu-shohin-torihiki-gyosya ) that deal in type I financial instruments such as bonds ( shasai-ken ) issued by GKs or kabushiki kaisha (KKs) and preferred shares ( yusen-shosshi-shoken ) issued by TMKs; and
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