IBANK 10.2.7 Special purpose entities
(1) A special purpose entity (or SPE) is a legal entity that is created solely for a particular financial transaction or series of transactions.
(2) An SPE may take the form of a limited partnership, limited liability company, corporation, trust or collective investment fund. An SPE may also be established under a special law that allows the creation of SPEs.
(3) Most sukuk securitisations require the creation of an SPE to:
(a) hold the assets transferred by the originator;
(b) issue sukuk based on the assets; and
(c) act as intermediary between the originator and the sukuk holders.
1 In conventional securitisations, the SPE must not have any other business. In a sukuk securitisation, the SPE can be organised, for example, as a mudarabah, musharakah or wakalah, but the requirement for the SPE to have no other business continues to apply.
2 By its nature, an SPE is a legal shell with only the specific assets transferred by the originator (that is, the SPE has no other property in which any other party could have an interest). The transferred assets are effectively owned, legally or through a trust, by the sukuk holders.
(4) An SPE must be bankruptcy-remote from the originator. It must not be consolidated with the originator for tax, accounting or legal purposes.
|Inserted by QFCRA RM/2017-1 (as from 1st April 2017).|