SWITZERLAND Law and Practice Contributed by: Johannes Bürgi, Roger Ammann, Lukas Wyss and Maurus Winzap, Walder Wyss Ltd
3.3 Principal Perfection Provisions The perfection steps for the transfer of the under - lying assets to the SPE depend on the assets to be transferred. Under Swiss law, for the transfer and assignment of rights and receivables gov - erned by Swiss law, an agreement and a written assignment declaration is required. Notification of the underlying debtor is not required. How - ever, prior to notification of the obligors, the obligors may validly discharge their obligations by paying the originator or the SPE, and in the event of bankruptcy over the SPE, such pay - ments would form part of the bankrupt estate of the SPE, until the obligors are notified. In relation to the creation of security interests over receivables and bank accounts, the exe - cution of a written security assignment agree - ment by the parties is sufficient to perfect the security interest in the receivables and the bank accounts. No notification is required, even though it is standard to notify the account bank, which is normally involved in the transaction in any event. 3.4 Principal Covenants The principal covenants of the originator and issuer in a Swiss securitisation transaction will depend on the assets to be securitised and the securitisation structure, but would typically cov - er those items that are also subject to principal representations. 3.5 Principal Servicing Provisions The servicer is appointed by the issuer under a servicing agreement which typically provides, among others, for the following services: • the collection of payments and recovery from the obligors and the transfer of such collec - tions to the issuer;
• the enforcement of the underlying receiva - bles; • record keeping in relation to the securitised assets; • overall administering of the securitised assets in line with the credit and collection policies of the originator; and • the provision of servicer reports. Upon the occurrence of pre-defined servicer ter - mination events, the servicer will be replaced by a replacement servicer. 3.6 Principal Defaults Typical events of defaults under the notes may include: • the occurrence of an insolvency event with respect to the issuer; • a payment default of the issuer on interest or principal of the most senior class of notes outstanding; and • non-compliance with other obligations under the transaction documents. Upon the occurrence of a default under the notes, the most senior class of noteholders typi - cally have the right to instruct the note trustee to declare all outstanding amounts under the notes due and payable and to have the security pro - vided enforced. 3.7 Principal Indemnities The scope of indemnities provided to the issuer depends on the specific transaction but typi - cally includes indemnities from the originator for losses and liabilities in connection with the securitised assets sold and of the servicer for losses and liabilities arising in connection with the servicing of the securitised assets.
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