SWITZERLAND Law and Practice Contributed by: Johannes Bürgi, Roger Ammann, Lukas Wyss and Maurus Winzap, Walder Wyss Ltd
1. Specific Financial Asset Types 1.1 Common Financial Assets Securitisation transactions in Switzerland have in the past primarily been based on trade receivables, auto leases and loans, credit card receivables, residential mortgage loans, com - mercial real estate loans and loans to small and medium-sized businesses. More recently, the market has seen a large num - ber of public securitisation transactions involving auto lease receivables and credit card receiva - bles. In addition, privately placed securitisation transactions are regularly implemented in Swit - zerland. Whilst in principle any type of asset can be securitised, general considerations around suitability of assets for securitisations transac - tions also apply in Switzerland. Covered bond transactions in Switzerland have been traditionally based on Swiss residential and commercial mortgage loans and, more recently, also on auto lease assets. Due to the increasing volume of residential and commer - cial mortgage loans in Switzerland, the number of covered bond transactions and securitisation transactions in Switzerland involving residential and commercial mortgage loans is expected to continue to grow in the future. 1.2 Structures Relating to Financial Assets Securitisation transactions in Switzerland are usually structured as (legal) true sale transac - tions in which a (domestic or foreign) bankruptcy remote special purpose entity (SPE) purchases a pool of income-generating assets and issues the notes. The notes are either publicly placed and listed or privately placed. The proceeds from the issuance of the notes are used by the SPE to acquire the initial pool of assets from
the originator upon the issuance of the notes. The securitisation structures then typically pro - vide for a revolving period during which the SPE acquires additional assets from the origi - nator fulfilling predefined eligibility criteria and thereby replenishing the asset pool on a regular basis. The replenishment period is followed by an amortisation phase, during which the notes are amortised over time using the proceeds from the asset pool, unless the originator repurchases the asset pool at the end of the revolving period and the notes are repaid in full using the pro - ceeds from the repurchase by the originator at that time. Transaction parties involved in Swiss securitisation transactions regularly include asset and corporate servicers for the SPE, secu - rity and note trustees, cash managers, account banks and further third-party service providers, in addition to the arrangers and managers who are usually involved in structuring the securitisa - tion transaction. 1.3 Applicable Laws and Regulations Switzerland has not enacted any specific prima - ry legislation covering securitisation (or covered bond) transactions. Instead, securitisation and covered bond transactions in Switzerland have been developed and are structured under the general legal and regulatory framework relevant as for any other financing transaction, such as the Swiss Code of Obligations (eg, relating to the formation of the SPE and the transfer of receiva - bles and assets), the Swiss Civil Code (eg, relat - ing to security interests), general capital market regulations and regulatory and tax laws. 1.4 Special Purpose Entity (SPE) Jurisdiction Securitisation transactions in Switzerland can be structured using either Swiss or foreign SPEs. However, various considerations typically need to be made when deciding whether a Swiss or
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