IBANK 10.2.9 Effects of true sale on originator

For asset-backed sukuk, the effects of a true sale on the originator include:

(a) derecognition, from the originator's balance sheet, of the assets sold, so that the assets become bankruptcy-remote (and therefore not subject to claw back by a liquidator in the event of the originator's liquidation); and
(b) the originator ceasing to have any financial liability to the sukuk holders in relation to the assets.
Inserted by QFCRA RM/2017-1 (as from 1st April 2017).