Progress on the restatement of the Luxembourg securitization legal regime set out by the law of 22 March 2004
On 20 September 2021, the opinion of the Luxembourg Chamber of Commerce on the draft law 7825 (the “Draft Law”), which aims at extending the Luxembourg securitization legal regime by providing more flexibility and more legal certainty while ensuring investors’ efficient protection, was published.
The Luxembourg Chamber of Commerce celebrates the main proposals of the Draft Law, including in particular:
- securitization vehicles will have extensive means to finance themselves, including through debt (article 1);
- securitization vehicles will be able to provide any securities in the context of a securitization operation (article 13);
- securitization vehicles will be able to actively manage their assets, within the limits set out by the law (article 14),
It is however notably regretted that the Draft Law does not expressly provide for the on-lending of funds by securitization vehicles.
The new legal regime would in any case be a welcome adaptation to the current needs of the market.