Since the implementation of the Luxembourg Securitisation Law of 22 March 2004 („Securitisation Law“), the Luxembourg securitisation market has developed significantly. The Luxembourg legislature has managed to create a modern framework that offers institutional investors a high level of flexibility and comprehensive insolvency protection mechanisms.
This means in detail: In addition to the permissibility of all asset classes and securitisation instruments, institutional investors are now offered the option of creating a separate cell (compartment) within a special purpose vehicle when choosing the legal form of the issuer. This means that the assets contributed are independent of the company and of other compartments and thus protected against insolvency. In addition, the respective compartments are subject to review by a recognized, auditing firm and have to fulfill corresponding organizational duties.
Luxembourg has ensured transparent and unambiguous legal certainty for institutional investors as well as reliability within the securitisation market and has established itself in recent years as the most attractive securitisation market in Europe.