Asset management companies have been included among the founders that can issue securities with the Communiqué (III-58.1.C) Amending The Communique On Asset Or Mortgage-Backed Securities (III-58.1) , which was published in the Official Gazette and came into force on 16.10.2021.
Asset-Backed Securities Fund
The establishment of an Asset Financing Fund (AFF) is obligatory for the issuance of Asset-Backed Securities -ABS. As it is known, the AFF is established on the account of the owners of the asset-backed securities with the money collected in return for the asset-backed securities. Funds established by AMCs will only be able to issue funds through taking over the assets of AMCs.
The fund portfolio is formed within one month at the latest, following the security issue date, in a way that the value of the assets included in the fund portfolio is not less than the total liability of the fund.
In the issuances where AMCs are the source institutions, the fund portfolio is formed through transferring the acquired receivables portfolio as a whole and over its fair value to ABS. A communiqué has not yet been published on how the fair value of the receivable portfolio is to be determined.
AMCs of which ABS's are source institutions can only be sold abroad. If the issuer's request is approved by the Board, different principles apart from the provisions explained in the Communiqué may be applied by the Capital Markets Board for the issues to be made abroad.
According to Article 59-2 of the Capital Markets Law, AMCs are obliged to monitor the fund asset, which is the collateral of the securities, apart from their other portfolios and assets. The Board may require that the records of the assets of collateral be kept at a separate institution as well as the issuer.
Immunity of the Fund's Assets
The receivable portfolio transferred to the Fund is separate from the assets of the AMC. Until asset-backed securities are redeemed; the collateral receivable portfolio cannot be used other than for the purpose of collateral, cannot be pledged, cannot be shown as collateral, cannot be seized including the collection of public receivables, cannot be included in the bankruptcy office, and interim injunction cannot be given thereon, even if the management or supervision of the AMC is transferred to public institutions.
Representation of the Fund
The fund board represents and manages the fund in a manner that protects the rights of the holders of the securities. The fund board is responsible for the accuracy of the records of the assets included in the fund portfolio and for the protection and preservation of these assets.
The fact that each receivable amount in the purchased receivable portfolios is ineffective in the process and, so to speak, waiting for its turn is undesirable in terms of system efficiency; it was however desirable that AMCs could operate with a more liquid balance sheet beyond the figures in their assets. The securitization of the expected cash flow and revenue from portfolios within the framework of financial instruments and making them marketable to investors was a promising step in the development of the market.
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