LUXEMBOURG Law and Practice Contributed by: Vassiliyan Zanev and Natalja Taillefer, Loyens & Loeff Luxembourg S.à r.l.
The Securitisation Regulation defines “securiti - sation” as a transaction or scheme whereby the credit risk associated with an exposure or a pool of exposures is tranched, having all of the follow - ing characteristics: • payments in the transaction or scheme are dependent upon the performance of the exposure or of the pool of exposures; • the subordination of tranches determines the distribution of losses during the ongoing life of the transaction or scheme; and • the transaction or scheme does not create exposures that possess all the characteristics listed in Article 147(8) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and invest - ment firms and amending Regulation (EU) No 648/2012. The Securitisation Regulation requires that the holders of a securitisation position, the compe - tent authorities and the potential investors (upon request) are provided with, inter alia: • regular information on underlying exposures; • prior to pricing, all underlying documenta - tion that is essential for the understanding of the transaction, with an indicative list of the documents included in the Securitisation Regulation; • prior to pricing, in the absence of a prospec - tus, a transaction summary or overview of the main features of the securitisation; • regular investor reports; and • any inside information and the significant events. The originator, sponsor and SSPE must desig - nate among themselves a reporting entity.
The Commission Delegated Regulation (EU) 2020/1224 of 16 October 2019 and the Commis - sion Implementing Regulation (EU) 2020/1225 of 29 October 2019 are applicable with regard to the detailed disclosure requirements under the Securitisation Regulation, including various tem - plates for the provision of information. The Commission Delegated Regulation (EU) 2020/1226 of 12 November 2019 and the Commission Implementing Regulation (EU) 2020/1227 of 12 November 2019 are similarly applicable for the provision of information in accordance with the STS notification require - ments. 4.2 General Disclosure Laws or Regulations The Securitisation Regulation has replaced and consolidated risk-retention requirements for - merly spread across various sectoral laws. Gen - erally, the originator, sponsor or original lender in respect of a securitisation must retain, on an ongoing basis, a material net economic interest in the securitisation of not less than 5% of the nominal value of the concerned exposures or, in the case of non-performing exposures (NPEs), where a non-refundable purchase price discount has been agreed, of the sum of the net value of the securitised exposures that qualify as NPEs and, if applicable, the nominal value of any per - forming securitised exposures. In addition, in an NPE securitisation, the servicer is allowed to take on the risk-retention slice. The Securitisa - tion Regulation also includes an exhaustive list of acceptable risk-retention techniques. See 3.10 Offering Memoranda . 4.3 Credit Risk Retention Risk Retention
230 CHAMBERS.COM
Powered by FlippingBook