SPAIN Law and Practice Contributed by: Jaime de la Torre and Jaime Juan Rodríguez, Cuatrecasas
majorities and the scope of decisions should be included. Changing any of these characteristics once the transaction has been executed is difficult, and could result in the winding down of the transac - tion (whenever possible). 1.3 Applicable Laws and Regulations The main laws and regulations that are relevant for the purposes of structuring a securitisation transaction is Spain are either EU regulations or domestic regulations. Spanish Regulations • Law 5/2015 (the “Spanish Securitisation Law”) sets out the domestic legal framework for securitisation transactions. • Law 6/2023 (the “Spanish Securities Markets Law”) sets out the domestic legal framework for the issuance of notes in capital markets. It has recently been recast in order to transpose a number of EU directives. • Royal Decree 724/2023 (the “Spanish Capital Markets Regulation”) sets out the domes - tic legal framework developing the Spanish Securities Markets Law. • Royal Decree-Law 24/2021 (the “Spanish Mortgage Mobilisation Regulation”) sets out the domestic legal framework for mobilis - ing mortgage loans by credit institutions by means of securitisation, covered bonds and collateralised loan obligations. EU Regulations • Regulation (EU) 2017/2402 (the “Securitisa - tion Regulation”) and delegated regulations – most transactions in Spain are covered under the definition of “securitisation” in the Secu - ritisation Regulation, and are therefore subject to its provisions.
• Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and delegated regulations are applicable in the case of public transac - tions when notes will be listed in a regulated market, and therefore a prospectus should be registered with the National Securities Market Commission (CNMV). 1.4 Special Purpose Entity (SPE) Jurisdiction The most common way to securitise Spanish- governed assets is through a transaction in Spain subject to both the Securitisation Reg - ulation and the Spanish Securitisation Law. There are several advantages for choosing this option, including the lower costs and the regula - tory framework, which has proven agile and is especially designed to allocate Spanish assets. Please see 6.2 SPEs regarding the entity known as a “securitisation fund” ( fondo de titulización ), which is a special type of orphan vehicle. However, it is possible to structure a cross-bor - der securitisation of Spanish assets by means of foreign SPEs, although the use of this structure is limited. Recently, several transactions pertain - ing to Spanish assets have been instrumented by means of an Irish designated activity com - pany (DAC) or a Luxembourg company together with a private Spanish SPE. Several complexities arise from this alternative, such as cross-border frictions in terms of listing requirements, tax implications and corporate obligations. 1.5 Material Forms of Credit Enhancement Of the multiple material forms of credit enhance - ment used in Spanish securitisation transac - tions, the following are used most frequently: • subordination – the tranching of notes is the most usual credit enhancement, but it should
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