Amendments to the Portuguese Securitisation Law: the Portuguese government has introduced several changes to the 1999 Securitisation Law with a view to improving the domestic securitisation market.
The Government has recently enacted Decree-Law 82/2002 of 5 April 2002, amending Decree-Law 453/99 of 5 November 1999 (the "Securitisation Law") and aiming at creating the necessary legal framework for the development of a domestic competitive securitisation market.
The 1999 Securitisation Law had for the first time allowed the securitisation of Portuguese receivables using collective investment undertakings or companies incorporated under Portuguese law as securitisation vehicles. However, several legal problems prevented the Portuguese securitisation market from developing as expected, i.e.:
(a) the tax regime of originators, securitisation vehicles and investors; and
(b) legal nature of securitisation companies, qualified as financial companies and subject to stringent capital requirements.
The New Securitisation Law’s goal is to reach a compromise that would make Portuguese securitisation vehicles attractive to originators and investors.
Decree-law 82/2002 has introduced the following changes with respect to securitisation funds:
(a) Share capital and own funds. Fund managers must be incorporated with a minimum share capital of € 750.000 and must now maintain own funds of at least 0,5% of the total net global value of the securitisation funds under management until the amount of € 75 million, plus 0,1‰ of the amount in excess of € 75 million.
(b) Ownership. The ownership of a fund manager by an originator that together with its affiliates has originated 20% of the global net value of its funds is no longer subject to a 20% limit.
(c) Transactions. Fund managers may still acquire securities listed in a regulated stock market and short-term debentures, provided however that such acquisition does not change the rating of securitisation units.
With respect to securitisation companies, the following legal regime shall apply:
(a) Incorporation. Securitisation companies are no longer qualified as financial companies. Under the new regime securitisation companies are subject to previous authorization and registration before the CMVM.
(b) Corporate purpose and capacity. Securitisation companies have as exclusive purpose the securitisation of debts, which includes the purchase, management and transfer of debts. Moreover, securitisation companies may only enter into loan money for liquidity purposes and can only acquire low risk and high liquidity securities under the regulatory conditions to be determined by the CMVM.
(c) Share capital and own funds. Securitisation companies must be incorporated with a minimum share capital of € 2.500.000 and its own funds must now represent at least 0,5% of the total net global value of the issued and circulating bonds until the amount of € 75 million, plus 0,1‰ of the amount in excess of € 75 million.
(d) Corporate resolutions. The acquisition of a qualified shareholding in a securitisation company, and the merger, split or the transfer of a significant portion of the company’s assets are no longer subject to authorisation by bondholders.
© Macedo Vitorino e Associados – April 2002
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