France has fundamentally changed its securitisation laws. Ordinance 2008-556, which came into effect this month, was the fruit of exceptional cooperation between market participants and the administrative authorities. It aims to achieve the following objectives: firstly, a more modern legal framework for securitisation; secondly, greater security and transparency in securitisation transactions and thirdly, the implementation of the European directive on reinsurance.
The reform modernises the legal framework for securitisation, taking into account the developments of the market practice and the constraints experienced by market participants. Under the new law, the use of a French securitisation vehicle in international transactions has been further favoured in two ways. Firstly, by the possibility of creating a securitisation vehicle with a legal personality which allows it to benefit from tax treaties and therefore avoid double taxation. Secondly, by the possibility of assigning receivables originated outside France under foreign law, thus facilitating the enforceability against third parties of such assignment.
