Securitisation 2025

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

Under Finnish insolvency laws, the legal grounds for such a demand for return primarily consist of sham transactions and transactions at under - value, as well as so-called claw-back grounds, where transactions concluded during a specified period before insolvency may be revoked if they meet certain objective criteria set out under law. Claw-back grounds include improper preference of a particular creditor over other creditors, pay - ment by unusual means and delayed granting or perfection of security. In addition, where a transaction’s true factual nature does not correspond to its supposed form, the form may be ignored and the transac - tion may be recharacterised to fit its true nature. Recharacterisation may result in the counterpar - ty of the transaction having to return all or some of the assets that it received from the insolvent party. 6.2 SPEs The SPE’s exposure to external liabilities should be limited to achieve bankruptcy remoteness, meaning that the SPE and its assets should be safe from bankruptcy proceedings. The SPE should be established specifically for the trans - action and not have any business activities or liabilities beyond the securitisation transaction. Its only function is to purchase the securitised assets, issue the notes to fund the purchase of assets and passively hold the assets for the duration of the transaction. The SPE should not have any employees. In Finland, there is no legal consolidation of an SPE or its assets in the insolvency of the origina - tor as such, but transactions with related parties are scrutinised more closely and subject to long - er claw-back periods than transactions between unrelated parties. For this reason, it is preferable for the SPE to be unrelated to the originator. In

private securitisation transactions, the parties will sometimes take a conscious risk to deviate from one or more aspects that ensure the bank - ruptcy remoteness of the SPE – for example, by using an SPE held by the originator group and not an orphan SPE. 6.3 Transfer of Financial Assets To avoid the securitisation transaction falling into any of the traps (described in particular in 6.1 Insolvency Laws and 6.2 SPEs ) in the event of the insolvency of the originator, the transac - tion should be structured so that the transfer of assets away from the originator is legally valid and enforceable even if the originator becomes insolvent and so that no aspect of the asset transfer can be avoided, revoked or recharac - terised under insolvency laws to the detriment of the SPE and investors. To ensure that the transaction is not recharacter - ised as a secured loan transaction, the transfer of assets from the originator to the SPE should meet the requirements for a legal true sale. For a legal true sale, it is generally required that the transaction seeks to irrevocably transfer title to – and risk of – the assets to the SPE and not, for example, to create a secured financing transaction that is meant to be unwound once the financier has received payment. There is no specific legislation on true sales: the criteria are discussed in legal doctrine, but not in a clear or definitive manner. A true sale is assessed as a whole, considering all relevant facts and circum - stances of the transaction either supporting a true sale or speaking against it. Legal opinions are typically obtained to confirm the validity and enforceability of a transaction, and to assess its true sale nature. Due to the lack of definitive rules, the Finnish true sale opinion is a reasoned or discussing opinion.

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