MALAYSIA Law and Practice Contributed by: Dilys Tan, Adnan Sundra & Low
Failure to comply with the covenants will typical - ly result in an event of default/dissolution event under the ABS, and all amounts outstanding thereunder shall immediately become due and payable. The principal covenants applicable to the servic - er and set out in the servicer agreement would include the following: • maintenance of all licences, approvals, authorisations and consents that may be necessary in connection with the assets and/ or the provision of its services; • undertaking to exercise due care and skill expected of a prudent owner of the assets in the administration and management of the assets; • undertaking to have adequate operational systems and resources to administer the assets; and • restriction from amending, modifying, waiv - ing or varying any provision in the underlying agreements relating to the assets. Failure by the servicer to comply with the above covenants would result in a servicer event of default, which may lead to the termination of the servicer and appointment of a new servicer. 3.5 Principal Servicing Provisions As mentioned in 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 ser - vices as may be required under the securitisation transaction. The servicer agreement would prin - cipally contain the following provisions. • The period of appointment of the servicer. • The payment of fees to the servicer for the provision of its services.
• The list of services to be provided by the servicer, including but not limited to: (a) the administration and management of the assets of the SPE; (b) the appointment of third-party service providers for the management of the as - sets; (c) the collection of all payments due to the SPE; (d) the enforcement of obligations due to the SPE; (e) the preparation of the relevant reports relating to the assets and/or the SPE; and (f) the preparation and maintenance of accounting records, and all such other accounts, books, documentation and records, in respect of the assets. • The conditions for termination of the appoint - ment of the servicer. Failure by the servicer to comply with its obliga - tions in the servicer agreement may result in the termination of its appointment and the appoint - ment of a new servicer to replace it. 3.6 Principal Defaults The events of default/dissolution events relating to the ABS are set out in the trust deed, and would typically include the following: • default in payment of any principal, premium, interest or profit under the ABS; • a breach by the SPE of any term or condition of the ABS or the provisions of the securitisa - tion documentation; • any misrepresentation by the SPE; • the occurrence of an insolvency event relating to the SPE; and • the appropriation or nationalisation of the assets of the SPE.
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