CYPRUS Law and Practice Contributed by: Thanasis Korfiotis, Loizos Papacharalambous, Eleni Korfiotis and Georgia Charalambous, Koushos Korfiotis Papacharalambous LLC
Koushos Korfiotis Papacharalambous LLC 20 Costis Palamas Street
Aspelia Court 1096 Nicosia Cyprus
Tel: +357 2266 4555 Fax: +357 2267 7485 Email: info@kkplaw.com Web: www.kkplaw.com
1. Specific Financial Asset Types 1.1 Common Financial Assets The assets (both consumer and business) that are most commonly securitised in Cyprus are collateralised loan obligations, including per - forming and non-performing credit facilities. 1.2 Structures Relating to Financial Assets Securitisation of the aforementioned financial assets is usually for the purpose of financing the acquisition of a non-performing loan (NPL) portfolio, which occurs when the purchaser buys the loan portfolio directly from the original lender or via the acquisition of the company (special- purpose vehicle (SPV) or credit purchaser) to which the original lender has transferred the NPL portfolio. In particular, such financing is secured by creating collateral over the NPL and non-NPL portfolios (collectively, the loan portfolio), to the benefit of the financier. 1.3 Applicable Laws and Regulations The principal applicable laws and regulations that have a material effect on the structures referred to in 1.2 Structures Relating to Finan- cial Assets are:
• the Sale of Credit Facilities and Related Mat - ters Law (169(I)/2015) (the “Sale of Loans Law”), where the majority of the transactions held on the island involving financial assets were concluded pursuant to this law; and • the Credit Servicers and Credit Purchasers Law (122(I)/2024) – this newly introduced law was enacted to transpose Directive (EU) 2021/2167 on credit servicers and credit pur - chasers into Cyprus law. The Securitisation Law (88(I)/2018) transposes Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017, providing a general framework for securiti - sation (the “Securitisation Regulation”) in Cypriot law. However, it is not the standard legal regime under which the majority of the securitisation transactions occurred in Cyprus in the past few years, as described in 1.2 Structures Relating to Financial Assets . 1.4 Special Purpose Entity (SPE) Jurisdiction The vehicles to which loan portfolios have been transferred by 8 November 2024 (such loan portfolios shall be referred to herein as “legacy portfolios”) were incorporated in Cyprus, as this
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