Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Securitisation definition

What does Securitisation mean? Securitisation is a financing technique that converts non‑tradable, income‑producing assets into tradable securities by pooling exposures and issuing notes backed by their cash flows. In practice, an originator sells receivables (for example, mortgages, consumer loans or trade receivables) to a bankruptcy‑remote special purpose vehicle (SPV/SSPE), which issues asset‑backed securities, usually in tranches (senior, mezzanine and junior). Alternatively, in a synthetic securitisation the credit risk is transferred by credit protection while assets remain on the originator’s balance sheet. Key legal features include: achieving a true sale or effective risk transfer; perfection/notification of assignments (assignation in Scotland); security and trust arrangements; servicing...

Structured products and securitisation disputes: key UK judgments on insolvency and restructuring, bondholder governance, clause construction, flip clauses, misrepresentation, default notices, valuations and investor disclosure

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Practice notes

Practice Note

This Practice Note summarises key authorities and commentary relevant to practitioners in structured products and Securitisation. The decisions are arranged by subject area and include:

Insolvency and restructuring
Bondholders binding and being bound by other stakeholders
Interpretation of clauses
Flip clauses
Duty of care misrepresentation
Notice of default
Valuations
Disclosure to investors

Insolvency and restructuring

Re ARM Asset Backed Securities SA [2014] 2 BCLC 364, [2014] EWHC 1097 (Ch) 28 March 2014. The Luxembourg regulator, the Commission de Surveillance du Secteur Financier (the CSSF), sought the opening of liquidation proceedings under article 39 of the Luxembourg Law on Securitisation against a company incorporated in Luxembourg. However, following an application by the directors, the High Court appointed provisional liquidators on the basis that the company was insolvent and that its centre of main interests lay in England. The company’s registered office was in Luxembourg and its only business was issuing bonds to investors and using the proceeds to acquire life insurance policies in the US, which were held via a US trust...

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Web page updated on 22/05/2026

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