MALAYSIA Law and Practice Contributed by: Dilys Tan, Adnan Sundra & Low
• hire-purchase loans – providers of hire-pur - chase automobile loans who are not financial institutions; • housing loans – providers of housing loans who are not financial institutions; • loan receivables – providers of loans who are not financial institutions; • credit and debit card receivables – providers of credit and/or debit cards; and • debt-settlement receivables – water conces - sionaires. The originator/seller is responsible for ensuring that its internal systems are in place such that funds due to the SPE are separated and ring- fenced from other funds due to the originator. For more information on the originator, please refer to 1.2 Structures Relating to Financial Assets . 2.4 Underwriters and Placement Agents The concept of “underwriter” or “placement agents” is not used in securitisation transactions in Malaysia. There are, however, principal advis - ers, lead arrangers and lead managers. Principal advisers are generally investment banks who would typically structure the secu - ritisation transaction and advise the originator on this. Lead arrangers, on the other hand, typically submit the necessary applications to the SC (where necessary) or lodge the relevant docu - ments (such as the lodgement kit, the informa - tion memorandum and the trust deed relating to the issuance of the ABS) with the SC. The lead arrangers are also investment banks. Lead managers who are investment banks would function as the intermediary between the issuer
and the investors, and would help to market and sell the ABS. 2.5 Servicers A servicer is appointed by the SPE pursuant to a servicer agreement to administer the assets of the SPE and/or to perform on behalf of the SPE such services as may be required under the securitisation transaction. Typically, the role of a servicer is undertaken by the originator of the assets, as they would be the best person to administer the assets and would have the proper systems in place. However, the servicer role may be undertaken by a third-party service provider instead. If the originator is also the servicer, it is necessary to ensure that the services provided by the originator are provided on an arm’s length basis on market terms and conditions. Pursuant to the LOLA Guidelines for asset- backed transactions, the duties of a servicer must include the following: • the servicer must keep proper accounts; • the servicer must have adequate operational systems and resources in place to administer the assets – such internal systems should ensure that the cash flow belonging to the SPE is “ring-fenced” and segregated in rela - tion to the securitisation transaction; • any change of the servicer must be informed to the trustee; and • where there is any change of servicer, the legal documents must provide for the periodic transfer of the necessary information from the originator to the new servicer to enable the monitoring of the assets, its performance analysis and collections from debtors of the originator.
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