NORWAY Law and Practice Contributed by: Markus Nilssen, Vanessa Kalvenes and Marcus Cordero-Moss, BAHR
The new Norwegian legislation does not con - tain any particular rules preventing securitisation from being carried out by government-spon - sored entities. 4.13 Entities Investing in Securitisation Norwegian investors are not restricted from investing in foreign securitisation positions. The impact of the new securitisation framework on the Norwegian capital market is difficult to predict. Generally, the investor base for secu - ritisation positions in true sale securitisations is expected to consist mainly of large and insti - tutional investors, such as financial institutions, pension funds and insurance companies. The riskier tranches of true sale securitisations and synthetic securitisations are expected to be placed with investors demanding a higher rate of return on their investment and who are willing to accept higher risk – eg, specialised funds. 4.14 Other Principal Laws and Regulations See 1.3 Applicable Laws and Regulations . 5. Synthetic Securitisation 5.1 Synthetic Securitisation Regulation and Structure Synthetic securitisation is permitted in Norway and, as of 1 January 2025, has been success - fully utilised by one Norwegian bank. Synthetic securitisation is a securitisation where - by the credit risk associated with the underlying financial assets is transferred to an SPE and/ or investors without a true sale. This can be achieved either by the use of credit derivatives or financial guarantees.
Compared to traditional securitisation, synthetic securitisation is both more flexible and faster to implement, mostly due to the fact that the under - lying financial assets are not transferred by way of a true sale transaction. Thus, the costs related to the transaction may be lower than for a tra - ditional securitisation. In contrast to traditional securitisations, the purpose of a synthetic secu - ritisation is almost always capital management and very rarely funding. Synthetic securitisation will be subject to the same legal framework as traditional securitisa - tion in Norway. Applicable laws depend on the structure of the transaction. 6. Structurally Embedded Laws of General Application 6.1 Insolvency Laws The Norwegian legislation currently in force does not explicitly provide for securitisation and, in practice, securitisation is therefore impossible for Norwegian financial institutions. Prior to 2016, Norwegian securitisation rules existed but were viewed as inflexible and inade - quate to promote an active securitisation market in Norway. However, following the implementa - tion of the Securitisation Regulation in the EU, the Ministry of Finance published a legislative proposal on 4 December 2020, to implement expected corresponding EEA rules into Norwe - gian law by cross-reference in Norwegian legisla - tion. The legislative proposal was passed by the Norwegian Parliament on 23 April 2021, but as of January 2025 has not yet entered into force. Fol - lowing the implementation of the Securitisation Regulation in the EEA Agreement in June 2024, it is expected that the new Norwegian securiti - sation legislation will take effect sometime in
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