Maintenance Act, 1998
R 385
Banks Act, 1990 (Act No. 94 of 1990)NoticesDesignation of an Activity not Falling within the meaning of "The Business of a Bank"Exemption Notice relating to Securitisation Schemes9. Servicing |
| 1) | Conditions relating to servicing |
| a) | A bank or another institution within a banking group may undertake, notwithstanding the fact that such a bank or other institution is acting in a primary role in respect of a traditional or synthetic securitisation scheme provided that- |
| i) | a formal servicing agreement shall be in place, which agreement shall specify the services to be provided and the standard for the performance of the services; |
| ii) | confirmation shall be included in the disclosure document that the servicing agent, in its capacity as servicing agent, is under no obligation to fund payments owed in respect of the securitisation scheme, absorb losses incurred in respect of the assets or risk transferred to the special-purpose institution concerned, or otherwise recompense investors for losses incurred in respect of the said securitisation scheme; |
| iii) | the servicing agent may withdraw, at its own discretion and subject to a reasonable period of notice, from its commitments as servicing agent; |
| iv) | services and remuneration shall be provided in accordance with market related terms and conditions. |
| b) | When payments due in terms of an underlying transaction are made through the agency of a bank that acted in a primary role or of any other institution within the banking group of which such a bank is a member, the bank or such other institution shall not transfer any funds to the special-purpose institution in respect of such payments unless such payments have actually been received from the obligor in terms of the underlying transaction. |
| c) | Item (b) above shall not preclude a servicing agent from providing a short-term advance, at the servicing agent's sole discretion, in order to cover an unexpected shortfall arising from delayed payments on assets provided that such a short-term advance shall comply with the relevant requirements specified in regulation 23(6)(h) of the Regulations relating to Banks. |
| d) | Payment of any fee or other amounts due in respect of the services of a bank or another institution within a banking group acting as a servicing agent may not be further subordinated, or be subject to deferral or waiver, beyond what is explicitly provided for in the order of priority set forth in the provisions of the securitisation scheme that regulate entitlement to payment. |
