NETHERLANDS Law and Practice Contributed by: Mandeep Lotay and Dámaris Engelschman, Freshfields LLP
ers cars or other types of vehicles under a lease arrangement. An originator’s responsibility is principally to reassure the SPV that the financial assets that are being securitised are of sufficient quality. This responsibility comes in the form of provid - ing representations and covenants in relation the financial assets, as well as agreements in rela - tion to future conduct with respect to such finan - cial assets, including its business affairs. Often, the originator is also the financial asset servicer, in which case there is range of protections that it provides to the SPV with regard to the sound management of the financial assets, including collections. An originator is often required to pro - vide credit enhancement in the form of invest - ing in the most subordinated asset tranches, as well funding any reserve funds. An originator’s entitlement to deferred purchase prices is also contingent on – and limited to – the cashflows available to the SPV from time to time. 2.4 Underwriters and Placement Agents If appointed by the originator, an underwriter performs a vital function in the transaction by agreeing to subscribe to the securitised notes for a certain price. This gives the originator trans - action certainty by ensuring that the relevant securitised debt will be issued and the required funds received. Investment banks typically pro - vide underwriting services and receive fees in the form of commissions (or similar) for providing their services. 2.5 Servicers As the SPV does not have the expertise, opera - tions and regulatory permissions to manage and collect payment on the acquired assets, it will typically enter into a contractual arrangement with the originator/seller according to which the latter will keep servicing the transferred assets
(ie, collecting payments on the assets on behalf of the SPV and managing the contractual rela - tionships with the debtors), for which services it will receive a fee. Alternatively, there are certain specialised enti - ties that act as servicer for receivables subject to a securitisation. These entities are often either engaged as sole servicer or as a sub-servicer or delegate of the originator/seller as master ser - vicer. The offering of and brokerage in relation to finan - cial products, including consumer loans, mort - gage loans and any form of credit, concern regu - lated activities in the Netherlands for which a regulatory licence must be obtained. As acquir - ing consumer receivables falls within the scope of the activities that require a licence, an SPV would usually also be required to have an appro - priate licence. However, there is an exception which is frequently applied within the context of Dutch securitisation transactions whereby an issuer SPV is exempt from the licence require - ment if the servicing and administration of the receivables is outsourced to an entity which is itself in possession of the relevant licences. Orig - inators/sellers, or the original lenders of record to which the servicing and administration of the receivables has already been outsourced, typi - cally take on the role of servicers in Dutch secu - ritisation transactions. As the originators/sellers or the original lenders of record usually already possess the appropriate regulatory licences, this solves the above-mentioned licence issue for the issuer SPV. 2.6 Investors Credit institutions often take the senior and/or mezzanine investment position in securitisation transactions. Other types of investors are fre - quently insurers, pension funds and alternative
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