UK Law and Practice Contributed by: Guy O’Keefe, Richard Jones, Oliver Wicker and Kate Patane, Slaughter and May
2.3 Originators/Sellers An originator is the entity that originally creates or originates the assets being securitised, or that has purchased such assets before they are securitised. In a typical securitisation transac - tion, the originator sells or transfers a portfolio of financial assets to an SPE, such as loans, credit card receivables or mortgages. The originator is sometimes a financial institution such as a bank, but non-bank originators are a growing feature of the securitisation market. An originator will typically have an ongoing interest in the secu - ritisation. Often, this is by way of an entitlement to the cash generated by the sold receivables to the extent it is not needed to pay third-party investors. An entity that acts as sponsor is subject to regu - latory requirements under the UK Securitisation Regulations Framework (or the EU Securitisation Regulations, as applicable). 2.4 Underwriters and Placement Agents Underwriters – often investment banks – serve to facilitate the issuing and distribution of the securitised instruments to investors. Their role encompasses structuring the transaction, pric - ing the securities, ensuring compliance with rel - evant legal and regulatory frameworks relating to the marketing of securities and often providing a commitment to purchase any unsold securities. Public securitisations, where the securities are to be widely distributed, will typically have multiple banks that act as underwriters. In private placements or direct issuances where the securities are sold to a smaller number of sophisticated investors, underwriters are less frequently seen. In such cases, a bank may be appointed to market the deal but not provide an underwriting commitment. A bank fulfilling this function could be described as a placement
agent (although that description/title is not fre - quently used in a securitisation context). 2.5 Servicers The servicer is responsible for managing the day-to-day operations of the securitised assets, such as collecting payments from borrowers, handling customer enquiries, managing delin - quencies and undertaking enforcement and repossession procedures, if necessary. Servicers thus play a critical role in maintaining the performance and cash flow stability of the securitised asset pool and will generally receive a fee for their role that is sufficient to attract a replacement servicer if the original servicer ceases to be able to perform its role. The entity that acts as servicer is often the same entity, or part of the same group as the origi - nator, but transaction documents typically con - template that the servicer may be replaced in the future (for example, if the original servicer ceases to be able to perform its role). Specialist servicers are frequently appointed at the outset of transactions to act as back-up servicers, with the intention being that such an entity would be able to quickly assume the role of servicer, if necessary. 2.6 Investors Investors provide the capital necessary for funding the purchase of assets by buying the securities issued by the SPE. They are typically institutions such as banks, pension funds, insur - ance companies and asset managers, seeking to deploy capital and earn a yield. Investors will perform due diligence to assess the risk pro - files, credit quality and potential returns of the securitisation. Their investment decisions are guided by their own analysis of the underlying assets, the structure of the deal, the protections
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