What is a qualifying SPV?
Clear of the verbosity of the standards, a qualifying SPV is an independent legal entity, independent in the sense that it does its own decision-making (“auto pilot”, as they say). And it must be a “special purpose” entity, with limitation on its business, assets that it can hold and the transactions it can enter into. The assets as well as the transactions are related to the business of securitization. The above is an over-simplification. FAS 140 gives details of what the QSPV do, what derivatives it can enter into, etc. Is an SPV or qualifying SPV a must? No. One-to-one transactions might also achieve off-balance sheet treatment, provided the buyer has the ability to sell, pledge or otherwise beneficially exploit the asset. What is so wrong with the buyback option? As stated before, to qualify for removal-of-asset, the asset must be transferred without any retained option to buyback with the transferor. The purpose of this condition is clear: a transfer with a buyback option is not s
Related Questions
- How does Anthem notify a potential Qualifying Beneficiary of their rights and obligations under COBRA for those plans that have contracted with Anthem to provide COBRA administration services?
- If Anthem performs COBRA administration for the plan, how does the employer notify Anthem that a Qualifying Event has occurred and how much time does the employer have to notify Anthem?
- Who is eligible to take the CGFNS Qualifying Exam®?
