Titrisation v Securitisation: A Legal Comparison in France and the United Kingdom

Securitisation is a financing technique that originated in the United States and the United Kingdom. France has aimed at introducing this concept into French law through legislative intervention. However, the quantity of securitisation deals remains much higher in the UK than in France. The issue that this article addresses is whether this lack of interest for securitisation a  la frangaise is justified by legal reasons. French law knows only of a very limited form of trust, which cannot be used for securitisations. A specific vehicle, the FCC, was created for this purpose under French law. There were restrictions on the type of receivables that could be securitised. This meant that until recently only true sale securitisations were possible under French law. These restrictions have been lifted, and the differences that remain between the two forms of securitisation, although limited, are important. First, French securitisations use a specifically created assignment form; second, French securitisations are more insolvency-remote than their British counterparts.

Law and Financial Markets Review, Volume 2, Number 2, March 2008, pp. 143-157

Online