Synthetic securitisations
Synthetic securitisations

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Synthetic securitisations
  • What is a securitisation?
  • What is a synthetic securitisation?
  • Market data
  • Why do parties enter into synthetic securitisations?
  • What is the difference between a true sale securitisation and a synthetic securitisation?
  • How do you document a synthetic securitisation?
  • Regulations applicable to synthetic securitisations

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—financial services, Brexit—impact on finance transactions—Key issues for securitisation transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

What is a securitisation?

Securitisation is a technique used to finance the ownership or sale of types of assets that would otherwise be difficult to finance/sell (ie 'illiquid' assets such as bilateral loans and mortgage and other loans to natural persons). In its most common and basic form securitisation is a financing technique that consists in