USA Law and Practice Contributed by: Bjorn Bjerke, Corey Reis and Joshua Kopel, A&O Shearman
2.3 Originators/Sellers Originators generate and/or own the underlying receivables or other financial assets that are to be securitised, and transfer them to the SPE. The obligations arising with respect to such receivables/financial assets are originally owed to an originator or are acquired by a seller before the transfer to the SPE takes place. Originators include government-sponsored enti - ties (GSEs), captive financial companies of the major auto manufacturers, other financial com - panies, commercial banks, building societies, manufacturers, insurance companies and secu - rities firms. 2.4 Underwriters and Placement Agents Underwriters (including initial purchasers in a 144A transaction) and placement agents are registered broker-dealers responsible for plac - ing the ABS. In some securitisation transactions they are also responsible for establishing and preparing the relevant securitisation structure and documentation. 2.5 Servicers Servicers are typically the sponsor or an affili - ate of the sponsor. The servicer will typically be responsible for collecting payments under, and ensuring that the issuer complies with, the obligations relating to the collateral. In some securitisations, such as CLOs, the servicing role may be quite active, consisting of purchasing and selling relevant assets, participating in any workouts as required and otherwise managing the collateral in accordance with the terms of the transaction. The servicer typically also pro - duces periodic reports and interfaces with the trustee to ensure the correct application of funds in accordance with the applicable priority of pay - ments waterfall.
2.6 Investors Investors constitute a diverse group. In a typi - cal securitisation the investors will have a right to payment, and investors will also have certain rights to direct the trustee to take enforcement actions. The controlling class of noteholders will thereafter have enhanced ability to direct the trustee in accordance with the terms of the transaction documents. Typically, investors will not have responsibilities per se, although investors may be subject to certain deemed representations relating to their eligibility to invest in the securitisation. Inves - tors in unfunded ABS tranches will typically have contingent funding obligations and may be required to provide additional credit support, or face replacement if their credit drops below agreed levels. 2.7 Bond/Note Trustees Indenture trustees act on behalf of notehold - ers. Owner trustees typically act on behalf of the holders of any trust certificates issued by an issuer trust (if applicable). Trustees typically act as communications and payment agents. The trustees also undertake other specified admin - istrative tasks, but typically avoid taking any discretionary actions other than pursuant to a direction from the relevant noteholders. The trustees tend to be large banking associa - tions that satisfy relevant regulatory and ratings agency criteria such as requirements under the Trust Indenture Act (for registered ABS issu - ances) and as required by Investment Company Act Rule 3a-7, where the issuer relies on that exemption. 2.8 Security Trustees/Agents Security trustees/agents hold a security inter - est in the underlying pledged assets on behalf
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