Banks Act, 1990 (Act No. 94 of 1990)NoticesDesignation of an Activity not Falling within the meaning of "The Business of a Bank"Exemption Notice relating to Securitisation Schemes16. Disclosure |
| 1) | General |
| a) | Investors in a traditional or synthetic securitisation scheme shall be made aware that the instruments in which they invest do not represent deposits in a bank, but that the instruments are subject to investment risk, including possible delays in repayment and loss of income and principal amounts invested, and that the institution that acts in a primary role and its associated companies and, when the institution that acts in a primary role is a bank, any other institution within the banking group of which such a bank is a member, do not guarantee the capital value or performance of the instruments issued by the special-purpose institution. |
| 2) | Conditions relating to disclosure |
| a) | A disclosure document shall be issued by a special-purpose institution in respect of a traditional or synthetic securitisation scheme, which document, as a minimum, shall clearly state, amongst other things- |
| i) | the name of the special-purpose institution; |
| ii) | the name of the auditor of the special-purpose institution; |
| iii) | the total amount of commercial paper to be issued by the special-purpose institution; |
| iv) | whether or not the particular issue of commercial paper is listed; |
| v) | a description of the assets transferred or the portfolio credit derivative instrument used to transfer risk and the nature of such risk; |
| vi) | the cash flows arising from the assets transferred or purchased as collateral, or the premiums received, that will be utilised for the payments by the special-purpose institution in respect of the commercial paper issued; |
| vii) | confirmation by the auditor of the special-purpose institution that the issue of commercial paper pursuant to a securitisation scheme complies in all respects with the relevant provisions of this Schedule; |
| viii) | the details of any credit-enhancement facilities; |
| ix) | the details of any liquidity facilities; |
| x) | that the institution acting in a primary role is not obliged to support any losses suffered by the special-purpose institution or investors in the special-purpose institution in respect of a traditional or synthetic securitisation scheme; |
| xi) | that the board of directors or the trustees of the special-purpose institution are independent from the institution acting in a primary role and, whenever such an institution is a bank, of any other institution within a banking group of which such a bank is a member; |
| xii) | all other information that may reasonably be necessary to enable an investor to ascertain the nature of the financial and commercial risk of his or her investment. |
| b) | The Registrar may prescribe additional disclosure requirements in respect of a traditional or synthetic securitisation scheme. |
| c) | A disclosure document relating to the issue of commercial paper pursuant to a traditional or synthetic securitisation scheme- |
| i) | shall in the case of a special-purpose institution that is a company, be signed by two directors of such a company who are duly authorized to sign; |
| ii) | shall in the case of a special-purpose institution that is a trust, be signed by two senior officials of such a trust who are duly authorized to sign. |
| d) | Once a disclosure document has been signed by the persons indicated in item (c) above, such signatories shall be deemed to have authorized the issue of such a disclosure document. |
| e) | Every signature to a disclosure document shall be dated, and the latest of such dates shall be deemed to be the date of the disclosure document. |