Securitisation 2025

FINLAND Law and Practice Contributed by: Maria Lehtimäki, Niklas Thibblin and Timo Lehtimäki, Waselius

1. Specific Financial Asset Types 1.1 Common Financial Assets Securitised assets include various types of financial assets, such as equipment finance receivables, unsecured consumer loans and trade receivables. The most active issuers are specialised lenders, which originate these types of assets. There is currently no securitisation market for housing and commercial mortgages in Finland because these are typically used as collateral for covered bonds, but there is no legislative obstacle to securitising such assets. Some corporate and SME loans are securitised, either synthetically or by true sale. Non-perform - ing loan exposures are starting to be securitised. 1.2 Structures Relating to Financial Assets All securitisation transactions where tranched exposures are backed by a pool of assets are generally governed by the EU Securitisation Regulation. There is no specific Finnish secu - ritisation law. The rules regarding the transfer of receivables are generally governed by the Finn - ish Promissory Notes Act and related legal prin - ciples, precedents and doctrine. As there is no specific securitisation legislation that would steer or confine the market to a spe - cific structure, there is some diversity in struc - tures. However, generally, private transactions are structured in a less complicated manner than public transactions, with the latter being much influenced by existing public transaction struc - tures. The common goal in all off-balance sheet struc - tures is that the pool of assets is segregated from the originator’s assets and safe from the reach of the creditors of the originator, even if the originator becomes insolvent. In practice,

segregation is accomplished by the originator selling the assets to a special purpose entity (SPE) established specifically for the transac - tion to purchase and hold the assets and issue the instrument. There are only a handful of synthetic transac - tions in the market, and these are generally structured as risk sharing transactions involving the issuance of credit-linked notes to investors, referencing the first-loss piece of the portfolio. 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 EU Securitisation Regulation (Regulation (EU) 2017/2402 laying down a general frame - work for securitisation and creating a specific framework for simple, transparent and stand - ardised securitisation, as amended), and its delegated rules and regulatory guidelines and technical standards. • the Finnish Act on Credit Institutions (610/2014, as amended, implementing the EU Capital Requirement Regulation and Directive regime in Finland). • the Finnish Promissory Notes Act (622/1947, as amended). • the Finnish Act on Mortgage Banks and Cov - ered Bonds (151/2022, as amended). 1.4 Special Purpose Entity (SPE) Jurisdiction For commercial purposes, in Finnish securiti - sation transactions, it is common to set up the SPE in an offshore jurisdiction such as Ireland or Luxembourg that:

CHAMBERS.COM