The securitisation process and the role of SPVs in the local financial markets

Abstract

Securitisation is for financial services what digitisation is for the telecommunications industry. It has developed as an effective and efficient tool to raise funds and transfer assets and their risks, while offering the capital market an array of investment opportunities that did not exist before through the generation of transferable securities. Malta enacted its Securitisation Act in 2006 in order to provide a legal framework for this process. The thesis examines the term and analysis the various definitions of securitisation, its emergence in the 1970s, the parties involved and the most common types of securitisation structures. It also explores the role of securitisation during the recent 2008-2009 financial crisis, and provides an analysis of the implications that securitisation has on financial markets. Malta's domestic legislation and subsidiary regulations that effect securitisation are explained in detail.