Introduction to securitisation

Introduction

Securitisation, a complex structured financing, has evolved as the funding and risk transfer method of choice over the past few years. It is promoted by the European Commission as one instrument of choice in the context of the Capital Market Union. Despite the general economic downturn, and decreased reputation of securitisation products, the Luxembourg securitisation market continues to grow steadily. In addition, Luxembourg securitisation vehicles are used in many structures in Asset Management, Private Equity or Real Estate in order to optimize the investors benefits.

In this type of structured financing, a pool of financial assets (such as receivables, loans, mortgages, or leases) is transferred to a "special purpose vehicle" (SPV) that then issues securities, backed solely by the assets transferred and the payments derived from those assets.

It is therefore critical for Luxembourg corporate services, domiciliation companies, asset managers, private bankers and other service providers to understand the complete value chain of the securitisation business and to appreciate the opportunities and challenges it offers in a European context.

Objectives

At the end of the training course, participants will be able to:

• Explain the complete securitisation value chain;
• Get an overview of the Luxembourg securitisation market with examples;
• Appreciate the business opportunities for Luxembourg financial institutions;
• Define the impacts on regulatory, accounting and tax questions.

1. Introduction and basic principles of securitisation in general

2. Securitisation in Luxembourg

• Main regulatory frameworks
• Luxembourg market overview
• Luxembourg Securitisation Law
• Forms of Luxembourg securitisation vehicles
• Regulation of securitisation vehicles
• Multi-compartment vehicles

3. Tax aspects - Spotlight on ATAD

4. EU Securitisation regulation