What is a Qualifying Special Purpose Entity?
A QSPE is defined as a trust or legal entity that meets the criteria outlined below. Legal Isolation A QSPE must have a distinct standing from the Seller and cannot be dissolved, wound up or terminated by the Seller. The entity’s activities are governed by guidelines set by at least a majority of the beneficial interest holders, other than the Seller and its affiliates. This requirement minimizes the Seller’s control over the entity’s activities on an ongoing basis. Eligible Assets A QSPE may hold assets that satisfy the following criteria: • The transferred assets do not give the Seller significant influence over the entity’s financial and operating policies. • Derivative instrument agreements must be entered into at the time of SPE establishment or receivables transfer. • The entity may hold financial assets that insure against failure by others to service the assets or make payments. • The entity may hold servicing rights related to the assets that it holds. • The entity may tempora
