CYPRUS Law and Practice Contributed by: Thanasis Korfiotis, Loizos Papacharalambous, Eleni Korfiotis and Georgia Charalambous, Koushos Korfiotis Papacharalambous LLC
2.8 Security Trustees/Agents The appointment of a security trustee/agent is not required under the applicable laws. However, the securitisation structure normally entails the appointment of internationally reputable enti - ties, which offer loan management, cash man - agement and portfolio management services, to act as security trustees/agents in the name of which the collaterals described under 1.5 Mate- rial Forms of Credit Enhancement are granted. The role of the security trustee largely relates to activities requiring the release and/or execution of any of the collaterals. The same person could be appointed as both the paying agent and the security trustee. 3. Documentation 3.1 Bankruptcy-Remote Transfer of Financial Assets The transfer of a loan Portfolio to an SPV (as defined in 1.2 Structures Relating to Financial Assets ) is, as a matter of practice, carried out via a scheme of arrangement ratified by a court, since the SPV is a subsidiary of the seller/origi - nal lender who is in turn a legal person regis - tered pursuant to the Companies Law. A ratified scheme of arrangement is binding on the liqui - dator and thus bankruptcy remote. 3.2 Principal Warranties The principal warranties in the documentation that capture the transfer of an SPV and a loan portfolio (as defined in 1.2 Structures Relating to Financial Assets ) relate to representations of the original lender/seller regarding: • the lawfulness of the origin of the loans and collaterals (receivables), their continuously prudent servicing, the minimum recoverable
• the Credit Servicers and Credit Purchasers Law (as defined in 1.3 Applicable Laws and Regulations ) for transactions held after 8 November 2024. The Securitisation Law (as defined in 1.3 Applicable Laws and Regulations ) applies to transactions where a “securitisation vehicle” is deployed. 2.6 Investors Investors are persons who either hold interest in the purchaser of a loan portfolio or act as financiers in a securitisation transaction. These roles confer no responsibilities under the law but ensure compliance with the financing docu - ments. Persons who hold interest in the pur - chaser of a loan portfolio are normally vehicles with no substantive operations and international vehicles in the form of investment funds, where - as financiers are normally European Economic Area (EEA) banking institutions. 2.7 Bond/Note Trustees Even though the appointment of a bond/note trustee is not required under the applicable laws, the securitisation structure normally entails the appointment of internationally reputable enti - ties, which offer loan management, cash man - agement and portfolio management services, as paying agents having the right to exercise the rights, powers, authorities and discretions of multiple financiers (noteholders) and have a role in co-ordinating the repayment of the notes and monitoring the allocation of the receivables of the SPV in specific accounts operating – and charged – in relation to the securitisation trans - action (defined in 1.2 Structures Relating to Financial Assets ).
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