Special purpose entity (SPE) meaning

This glossary sets out numerous expressions regularly encountered in the restructuring & insolvency sphere. Words shown in bold within definitions are themselves explained in other entries in this glossary as well. A Article X The MLIJ contains a single provision named Article X, aimed at jurisdictions that have already implemented the MLCBI, like England, or are weighing its adoption. Article X states: ‘Not withstanding any prior interpretation to the contrary, the relief available under [insert a cross-reference to the legislation of this State enacting Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency] includes recognition and enforcement of a judgment’ (see Practice Note: UNCITRAL model law on recognition and enforcement of insolvency-related judgments (MLIJ): Article X). Asset-backed security (ABS) A form of security anchored by asset pools, for example loans, leases, and credit card receivables. Assimilated law From 1 January 2024, ‘retained law’ has been retitled ‘assimilated law’. The body of domestic law originally arising from EU obligations, created by the European...

Banking & Finance glossary A Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) The foremost Islamic, international, autonomous, independent, not-for-profit corporate body that develops and issues accounting, auditing, governance, ethics and Shari’ah benchmarks and standards for Islamic Financial Institutions (IFIs) and the wider Islamic finance sector. Founded in Bahrain in 1991, it is backed by a number of institutional members across more than 45 countries, including central banks and regulatory authorities, financial institutions, accounting and auditing practices, and legal firms. Its pronouncements are currently applied by leading Islamic financial institutions across the world and have advanced a progressive and gradual harmonisation of global Islamic finance practice. It also delivers professional qualification programmes—notably Certified Islamic Professional Accountant (CIPA), Certified Shari’ah Adviser and Auditor (CSAA), and the corporate compliance programme—in efforts to strengthen the industry’s human capital and governance frameworks. For further details, see Practice Note: Key participants in the Islamic finance industry—Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Acceleration Acceleration is the formal action...

Introduction to SPVs What is an SPV? 'SPV' means 'special purpose vehicle'. An SPV is a corporate entity, commonly with limited liability status, incorporated specifically to undertake a structured finance transaction in a selected legal jurisdiction and with an appropriate ownership set-up which, for tax, regulatory and/or accounting reasons, produces overall favourable treatment for the transaction it has been created to execute. SPE (special purpose entity) and SPC (special purpose company) describe essentially the very same idea. (SPV, SPE and SPC can also denote 'single purpose vehicle', 'single purpose entity' and 'single purpose company' respectively). Under Regulation (EU) 2017/2402 (the EU Securitisation Regulation) and UK securitisation rules, SPVs are termed securitisation special purpose entities (SSPEs) under those regimes. SPVs are most frequently employed, in practice, as financing vehicles (typically, issuers of securities) in structured finance deals (such as repackagings) and securitisations and, as a result, 'issuer' and 'SPV' are, in market usage, largely interchangeable expressions in many contexts. For introductory material on repackagings and securitisations, see the Practice...