As part of Malta's drive to introduce capital markets activity, legislation for Re-insurance Special Purpose Vehicles was enacted and the PCC concept was extended to the Reinsurance Special Purpose Vehicles. The new regulations - the Securitisation Cell Companies Regulations (S.L.386.16), continue to build on the Protected Cell concept by adapting and extending the protected cell company structure to cater for securitisation activity. The legislation leverages on Malta's experience in legislating for cells in other sectors including the investment funds and insurance sectors, where dedicated cell legislation notably contributed to Malta's growth in financial services.
Authorisations Unit Director Angele Galea St John detailed these new developments in an interview to the Cell Company Guide 2015, published by Captive Review.
Ms Galea St John explained that the Regulations now provide a legally entrenched framework for segregation of different sets of assets and risk instruments within a single special purpose vehicle, the SCC, thereby allowing for the launch of multiple insurance-linked securities without incurring any risk of cross-contamination between the different sets of creditors and investors. This is a first in securitization vehicle structures as these are normally set up with compartments in other jurisdictions. The SCC is also applicable as a vehicle for all types of securitization transactions
Ms Galea St John also added that the PCC offers various benefits to cell owners from efficient use of capital, down to cost sharing in respect of governance structures and reporting requirements. Cell structures offer the facility of flexibility, speedier set ups and cost effective solutions while being fully compliant with the Solvency II regulatory framework. The core and cells within the PCC structure are treated as ring fenced funds for the purposes of Solvency II. As a single legal entity, the PCC needs to comply with Solvency II as a whole thereby offering a proportionate facility for cells.
The full interview is available on http://www.mfsa.com.mt/pages/announcement.aspx?id=7078
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