SPAIN Law and Practice Contributed by: Jaime de la Torre and Jaime Juan Rodríguez, Cuatrecasas
are bound by the due diligence requirements under Article 5 of the Securitisation Regula - tion. • Qualified investors – transactions are usually restricted to qualified investors, as defined by Article 2 of the Prospectus Regulation. • Retail clients – if a securitisation position is to be marketed to any retail client as defined under Article 4(1) of Directive 2014/65/EU (ie, any client that does not constitute a “qualified investor”), certain strong requirements must be met, including the suitability test. 2.7 Bond/Note Trustees Given the continental nature of Spanish law, the concept of “trust” or “trustee” is alien to the Spanish Securitisation Law. However, as explained in 2.1 Issuers , SPEs are devoid of legal personality so must be administered by a special type of management company that has the following features. • Strongly regulated entities are the only type of entities that are legally allowed to administer SPEs under the Spanish Securitisation Law (Title III, Chapter II). They must be authorised by the CNMV, which has a list of authorised management companies available on its website. • Legal duties include handling the incorpora - tion, management and legal representation of an SPE in the interest of the noteholders. In particular, management companies must: (a) have staff with expertise; (b) conduct a risk assessment of the securi - tised assets; (c) avoid conflicts of interest; and (d) comply with reporting obligations. • Status – entities shall have the suffix “S.G.F.T.” in their legal name (as an abbrevia - tion of • sociedad gestora de fondos de titulización ).
• Foreign SPEs – according to Article 25.2 of the Spanish Securitisation Law, Spanish management companies may only incorpo - rate, manage and represent foreign SPEs that are similar to Spanish SPEs, in accordance with the applicable regulations of the relevant jurisdiction. Apart from the general obligation of the man - agement company to act in the interest of the noteholders, securitisations can be embedded with or without a meeting of creditors; see 1.2 Structures Relating to Financial Assets . 2.8 Security Trustees/Agents Due to the specific legal framework in Spain, the role of the security trustee is not necessary. However, there are a number of other agents that are customarily needed, such as the pay - ing agent, the billing and delivery agent and the account bank. 3. Documentation 3.1 Bankruptcy-Remote Transfer of Financial Assets The classic risk for securitisations is a potential claw-back in the event of the seller’s insolven - cy. Fortunately, the Spanish Securitisation Law contains an exception to the typical claw-back mechanism under the Spanish Insolvency Law. Securitisations made under the Spanish Secu - ritisation Law by means of an SPE enjoy an “absolute separation right”, which means that claw-back is substantially restricted as it can only take place on grounds of fraud. This legal exception is sufficient to comply with Article 20(1) of the EU Securitisation Regulation, which requires that the transfer of receivables to an
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