LUXEMBOURG Law and Practice Contributed by: Vassiliyan Zanev and Natalja Taillefer, Loyens & Loeff Luxembourg S.à r.l.
Loyens & Loeff Luxembourg S.à r.l. 18-20, Rue Edward Steichen L-2540 Luxembourg
Tel: +352 466 230 Fax: +352 466 234
Email: info@loyensloeff.lu Web: www.loyensloeff.lu
1. Specific Financial Asset Types 1.1 Common Financial Assets Two Levels of Regulation The type of assets that can be securitised in Lux - embourg varies based the applicable legislation. Securitisation transactions in Luxembourg are governed by two layers of regulation. On the national level, the Luxembourg Law of 22 March 2004 on securitisation, as amended (the “Secu - ritisation Law”) is applicable on an opt-in basis (see 4.10 SPEs or Other Entities for a definition of securitisation under the Securitisation Law). On a pan-European level, the EU Regulation (EU) 2017/2402 of 12 December 2017 (the “Securiti - sation Regulation”) (see 4.1 Specific Disclosure Laws or Regulations with regard to the defini - tion of securitisation under the Securitisation Regulation), aims to mandatorily capture the transactions satisfying certain conditions with the purpose of reducing macroeconomic risks relating to the securitisation. While there may be an overlap between the Securitisation Law and the Securitisation Regu - lation, the definition of “securitisation” under the Securitisation Law is broader than the defi - nition of “securitisation” used in the Securitisa - tion Regulation and, hence, a vast number of transactions carried out by Luxembourg secu -
ritisation undertakings (the “SPEs”) fall within the scope of the Securitisation Law, but not of the Securitisation Regulation. Securitised Assets Under the Securitisation Law The Securitisation Law does not, per se, limit the types of assets to be securitised, and the most commonly securitised assets are securi - ties, loans, mortgages, NPLs, trade and lease receivables, interests in investment funds and structured products. Nevertheless, the passive management requirement under the Securitisa - tion Law (please see 4.11 Activities Avoided by SPEs or Other Securitisation Entities ) may in practice have some practical implications for the types of securitised assets. Although most common assets to be securitised are intangible, securitisation of tangible assets (notably mov - able assets, inventory and commodities) is also acceptable, provided that the purpose of the transaction is to refinance those assets and to render them liquid. Securitised Assets Under the Securitisation Regulation The Securitisation Regulation is more restrictive with regard to the types of securitised assets and limits the securitisation transactions falling within its scope to credit risk only.
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