BANK 4.6.31 Treatment of eligible servicer cash advance facility

(1) A servicer cash advance facility is a liquidity facility under which a servicer to a securitisation advances cash to ensure timely payment to investors.

Note For servicer, see note 1 (g) under rule 4.6.5.
(2) A zero percent risk-weight may be applied to an undrawn servicer cash advance facility only if the facility is an eligible servicer cash advance facility.

Note If the servicer cash advance facility is not an eligible servicer cash advance facility, see rule 4.6.29.
(3) To be an eligible servicer cash advance facility:
(a) the servicer must be entitled to full reimbursement;
(b) the servicer's right to reimbursement must be senior to other claims on cash flows from the underlying pool;
(c) the facility is itself an eligible liquidity facility; and
(d) the facility may be cancelled at any time, without any condition and without any need to give advance notice.
Inserted by QFCRA RM/2017-2 (as from 1st April 2017).