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.