This content is from: Local Insights

Belgium

The Royal Decree expected to implement the important modifications contained in the Law of December 12 1996 (see International Financial Law Review, June 1997, page 43) was adopted on July 8 1997. Since then, a public and private scheme for securitizing receivables can be distinguished, depending on whether or not the financial instruments issued by the securitization vehicle are themselves subject to a public transaction.

The new Decree aims to clarify the regime for private securitization vehicles so that the scheme can function properly. The relevant rules are now:

  • Private vehicles function independently of the Belgian Banking and Financial Commission.
  • Private vehicles escape the heavy regulations applying to public vehicles set out in the Royal Decree of November 29 1993.
  • It is not compulsory for private transactions to appoint a management company, a custodian, a supervisory company, a collecting agent, or a rating agency. If these intervening parties are contractually appointed, they are not subject to conditions of clearance and must only comply with minimal rules of operation.
  • Private vehicles can acquire pools of receivables through a single transfer agreement, and through successive and on-going transfers.

Sandrine Hirsch

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