CLO Solution Bermuda – Corporate and Company Law
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Conyers provides legal and corporate services to a broad client base, including FTSE 100 and Fortune 500 companies, international financial firms and asset managers. The firm advises on the laws of Bermuda, the British Virgin Islands and the Cayman Islands, from offices in those jurisdictions and in the major financial centers of Hong Kong, London and Singapore.
Proposal to add the Cayman Islands to the EU AML list
- On 7 January 2022, the European Commission adopted a delegated regulation proposing to revise its list of EU high-risk third countries (the EU AML list) to add nine countries, including the Cayman Islands.
- EU securitization regulations prohibit the creation of special purpose securitization vehicles (SPVs) established in non-EU jurisdictions that are on the EU AML list.
- The addition of the Cayman Islands to the EU AML list will be published in the Official Journal of the EU on February 21, 2022 and the updated EU AML list will enter into force on March 13, 2022.
- EU entities should be prohibited from investing in notes (or other instruments) issued by a Cayman Islands securitization SPV from the date of entry into force of the updated AML list of the EU, with negative repercussions for certain transactions of secured loan obligations (CLOs)
Conyers “Bermuda CLO” Solution
Conyers is ideally placed to offer all legal, corporate, fiduciary and fiduciary services required in Bermuda for CLOs and other structured products, including: incorporation, management, trust, administration, regulatory, compliance services , listing and liquidation.
- Structured finance practice: Conyers has proven and long-standing expertise in advising on the full range of securitization transactions, including CLOs, repackaging transactions, asset-backed securitizations, insurance-linked securities, bond offerings guarantees, note programs, commercial paper and certificate of deposit programs, and other structured products.
- Capacity and resources: Conyers is Bermuda’s largest law firm and is ranked as a Tier 1 firm in all global legal directories. Conyers is also the largest business services provider in Bermuda with enough capacity to handle volume transactions.
- Industry Relations: We and other law firms in Bermuda have entered into an agreement with the Bermuda Monetary Authority (BMA) regarding an expedited process for setting up companies in CLO transactions. As part of the agreement, the BMA has committed to processing same-day trainings, whether for new incorporations or onward to Bermuda.
- Rating agencies: Bermuda, with its well-established insurance and reinsurance industry, is very well known to major rating agencies. Moodys, Fitch and Kroll have all been involved in Bermuda capital markets transactions, including ILS and ABS transactions and securitizations that we have worked on. Our transaction and securitization legal advice forms are prepared and accepted by rating agencies and counterparties.
- Advertisement: Through our legal and corporate services teams, we are able to assist with all aspects of listings, whether in Bermuda, the Bermuda Stock Exchange (BSX), or in the Cayman Islands, the Caymans (CSX).
Conyers Customer Services
Conyers is uniquely positioned in Bermuda, where we are able to provide all corporate and trust services necessary for the formation of a trust to hold the shares of the SPVs and the incorporation and ongoing administration of the SPVs. .
Our business service offering includes:
- SPV Formation Services
- Provide a registered office address and manage communication for the SPV
- Ensure that all statutory and regulatory filings are managed for the SPV and comply with applicable laws and regulations
- Provide independent directors residing in Bermuda to the SPV
- Provide corporate secretarial services to the SPV and maintain corporate documents
- Provide registrar services to the SPV
- Review of transaction documents and implementation of administration when closing transactions and annual obligations of the administrator
- Liaise with third parties to the transaction
- Liaise with regulatory bodies
- Our Trust Services offering includes:
- Establish a trust to hold the shares of the SPV
- Provision of fiduciary services
Regulatory and Compliance Services:
- Facilitate Bermuda’s compliance with:
- United States FATCA and Common Reporting Standards
- Anti-money laundering regimes
- Economic substance regimes
- Beneficial ownership regimes
- Provision of a liquidator for a simple voluntary liquidation
- Prepare a liquidation plan for more complicated dissolutions
- Advice on complex insolvency law and restructuring matters
- Bermuda is a well-established offshore jurisdiction and a highly respected place to do offshore business. It provides a neutral and user-friendly platform for parties around the world with different laws, regulations and taxes to do business with each other effectively and efficiently.
- Bermuda is fully recognized for operating to the highest international standards, including by international standards bodies such as the Financial Action Task Force (FATF) and the OECD. Bermuda is on the EU’s anti-money laundering white list, with the last full FATF review completed recently in January 2020.
- Bermuda has specialized laws, regulations, products and expertise for global transactions and investments that create a business and efficient environment. She is well placed to develop and administer CLO products.
- As a British Overseas Territory similar to the Cayman Islands, Bermuda has a legal system based on English law with independent courts. It meets the highest international standards for tax, anti-money laundering and insurance regulatory compliance. It is a tax-free environment. Bermuda is located one hour ahead of the east coast of the United States, which is more convenient for companies operating in the United States.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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