The requirement that the retained material net economic interest shall not be split among different types of retainers under SECN 5.2.4R shall be fulfilled by any of the following:
the originator or originators;
the original lender or original lenders.
Where more than one originator is eligible to fulfil the retention requirement each originator shall fulfil that requirement on a pro rata basis by reference to the securitised exposures for which it is the originator.
Where more than one original lender is eligible to fulfil the retention requirement, each original lender shall fulfil that requirement on a pro rata basis by reference to the securitised exposures for which it is the original lender.
By way of derogation from SECN 5.3.2R and SECN 5.3.3R, the retention requirement may be fulfilled in full by a single originator or original lender provided that either of the following conditions is met:
the originator or original lender has established and is managing the ABCP programme or other securitisation; or
the originator or original lender has established the ABCP programme or other securitisation and has contributed over 50% of the total securitised exposures measured by nominal value at origination.
Where more than one sponsor is eligible to fulfil the retention requirement, the retention requirement shall be fulfilled by either:
the sponsor whose economic interest is most appropriately aligned with investors as agreed by the multiple sponsors on the basis of objective criteria including, but not limited to, the transaction’s fee structure, the sponsor’s involvement in the establishment and management of the ABCP programme or other securitisation and exposure to credit risk of the securitisations; or
by each sponsor in proportion to the total number of sponsors.
The following must be taken into account when assessing whether an entity has been established or operates for the sole purpose of securitising exposures as referred to in SECN 5.2.5R:
the entity has a business strategy and the capacity to meet payment obligations consistent with a broader business model and involving material support from capital, assets, fees or other income available to the entity, relying neither on the exposures being securitised, nor on any interests retained or proposed to be retained in accordance with SECN 5, as well as any corresponding income from such exposures and interests; and
the members of the management body have the necessary experience to enable the entity to pursue the established business strategy, and the entity has adequate corporate governance arrangements.
