Securitisation investor due diligence
There had not only been deficiencies on the part of asset originating and structuring but also on the part of investors, e.g. in form of over-reliance on ratings et al. That’s how you can put one of the learnings from the subprime crisis. Regulators took this as an impetus to lay down obligations also for investors in the new regulations. You find them in Capital Requirements Regulation (CRR) Alternative Investment Fund Managers Directive (AIFMD).
It’s worth shedding some light on these little known rules. Our UK practice has analysed the current situation and the upcoming amendments and summarised the results in a report. It comes to the conclusion that one certainly should be aware in detail of these rules, but it’s not as onerous as it may seem at first glance. And: those rules should certainly not be viewed as a barrier by an investor to entering the securitisation market.