Regulatory Alerts2014-02-10
Decision No. 13 on Asset Securitization
The Capital Markets Authority, acting through the Governor of Banque du Liban, issued Decision No. 13 to authorize the establishment of securitization funds for tangible or intangible, movable or immovable assets. The decision mandates that such funds secure pre-subscription from ten investors, verify subscriber identities and financial statements with a qualified auditor's report, and clearly define their lawful investment objectives. Furthermore, it exempts intangible asset securitization from these conditions and requires compliance with prior Capital Markets Authority decisions on internal audit and regulatory compliance, taking effect upon publication in the Official Gazette on 20 March 2014.
Decision No. 13 Regarding Asset Securitization
The Chairman of the Capital Markets Authority / Governor of Banque du Liban,
Based on Law No. 161 dated 17/8/2011 concerning Capital Markets, having all the powers of the Capital Markets Authority related to the establishment, operation, and supervision of mutual funds for securitization operations,
Based on Law No. 705 dated 9/12/2005 concerning Asset Securitization,
Having held its sessions on 20 January,
Based on the Capital Markets Authority Council Decision No. [12] dated 26 February, 2015
It has been decided as follows: Article One: The Capital Markets Authority Council approves the establishment of a securitization fund for assets consisting of tangible or intangible, movable or immovable funds, provided the following conditions are met:
- Providing proof of pre-subscription by ten investors in the bonds that will be issued by the "Fund".
- Providing documents proving the identity of ten subscribers, their financial statements, and a qualified auditor's report.
- Stating the lawful investment purpose of the "Fund". The above conditions do not apply to the securitization of intangible assets, rights arising from lease contracts, debts, debt securities, and notes.
Article Two: The Capital Markets Authority Council approves the establishment of a securitization fund for assets consisting of tangible or intangible, movable or immovable funds, provided the entity complies with the provisions and conditions of each of the following decisions:
- Capital Markets Authority Decision No. 4 dated 14/8/2013 concerning Compliance.
- Capital Markets Authority Decision No. 5 dated 14/8/2013 concerning Internal Audit.
Article Three: This decision is published in the Official Gazette and takes effect from 20/3/2014.
Beirut, on 10 February 2014 Chairman of the Capital Markets Authority / Governor of Banque du Liban Riad Toufic Salame