Law modernising the Luxembourg 2004 securitisation law

The law amending the Luxembourg law of 22 March 2004 on securitisation (the “2004 Law”) (the “Law”) has been voted by the Luxembourg Parliament on 9 February 2022 and has been published on 4 March 2022. It will enter into force on 8 March 2022. The Law contains some targeted adaptations to the securitisation regime under the 2004 Law with the aim to clarify certain elements to enhance legal certainty and to ensure continuing flexibility of the Luxembourg securitisation regime adequate for the market’s needs.

Read our alert as we explore the major changes contained in the Law:

  • Additional sources of financing allowed for securitisation entities;
  • Active management of assets by a securitisation entity: opportunities for Collateralised Loan Obligations (CLOs);
  • Clarifications for securitisation entities that offer securities on a continuous basis to the public;
  • Additional forms of commercial companies allowed for securitisation entities;
  • Holding of securitised assets;
  • Increased flexibility and legal certainty for security interests granted by a securitisation vehicle;
  • Rules governing the creation and operation of compartments;
  • Rules governing ranking of investors’ rights.