CSSF Clarifies Its Position On 'Securitisation Special Purpose Entities'

The Luxembourg Supervisory Authority for the Financial Sector (Commission de Surveillance du Secteur Financier - the "CSSF") issued on 23 October 2013 its updated "Frequently Ask Questions" on securitisation vehicles ("FAQ") in order clarify its position in relation to the definition of "securitisation special purpose entities" under the law dated 12 July 2013 on alternative investment fund managers (the "AIFM Law").

Although securitisation special purpose entities should in principle fall outside the scope of the AIFM Law, it was not clear which Luxembourg securitisation vehicles were covered by the relevant legal exclusion, as the definition of securitisation vehicles under the Luxembourg law dated 22 March 2004 on securitisation vehicles, as amended (the "Securitisation Law"), is larger than the one of the AIFM Law referring to the definition provided by the European Central Bank Regulation (EC) No 24/2009 dated 19 December 2008.

In that respect, , the CSSF provides in the FAQ more clarity in order to determine which Luxembourg securitisation vehicles could be qualified as alternative investment funds ("AIF") and which are excluded from the scope of the AIFM Law.

Therefore, pursuant to the FAQ, the following criteria should be followed to assess the impact of the AIFM Law on Luxembourg securitisation vehicles in the sense of the Securitisation Law:

Luxembourg securitisation vehicles primarily acting as "first lenders" and originating new loans should qualify as AIFs and thus should fall under the scope of the AIFM Law, since no asset (and hence no credit risk) is transferred to or purchased by such entity, so that it should not be considered as being engaged in a securitisation transaction; Luxembourg securitisation vehicles issuing structured products linked to non-credit related underlying assets (i.e. assets other than...

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