Structured Finance and Securitisation 2010

Author: Gárdos István

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Practical Law Company Cross-Border Handbooks 2010, page 105-111

TRANSFERRING THE RECEIVABLES

Classes of receivables

11. What classes of receivables are usually securitised in your jurisdiction? Please explain any particular reasons (for example, the strength of the origination market) why such receivables are usually securitised and the progress of the market in securitising new classes of receivables.

There is currently no practice to comment on.

The transfer of the receivables from the originator to the SPV

12. How are the receivables usually transferred from the originator to the SPV (for example, assignment, novation, sub-participation, declaration of trust)? How is the transfer perfected? Are there any rules, requirements or exemptions that apply specifically to transferring receivables in a securitisation transaction?

Receivables are usually transferred under Hungarian law by assignment. Novation is rarely used, as it requires the participation of the debtor as well. A declaration of trust is not possible under Hungarian law. In an assignment, the receivable is transferred to the assignee by the mere agreement of the assignor and the assignee. Notification of the debtor or registration of the assignment is not necessary for the transfer of the receivables. To make the transfer effective in relation to the debtor, the debtor must be
notified of the assignment.

Until the debtor is notified, it is possible that the assignor might assign or create a charge on the same receivable more than once. The second (and any subsequent) assignee or chargee obtains no title in this case. However, based on the principle of debtor protection, if the subsequent assignee or chargee notifies the debtor first, the debtor is discharged by performance in accordance with the notice. Although there is no published decision on this issue, this case should be regarded as unjust enrichment, and the first assignee or chargee can request the amount paid by the debtor.

No special rule applies to the transfer of receivables in a securitisation transaction.

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