Securitisation boom sparks Asia firms to push for change

Taiwan and the Philippines have become the latest countries to attract attention following the completion of a number of high-profile securitisation deals in Singapore, Japan and Malaysia.
YD Deng at Taiwanese firm Lee & Li has gone so far as to prompt clients to lobby the government to clarify legislation. Fearing the predicted securitisation boom in the region could stall before it has started, Yeng has encouraged the Taiwanese government to look closely at the options open to them.
The Financial Institution Merger Act 2001 was passed three months ago, allowing asset management companies to set up. These companies are a ready source of asset-backed deals and thus provide the motivation behind a new securitisation law to be enacted next year.
The Philippines has taken similar steps. The Department of Finance has proposed a law permitting tax-exempt sales of asset-backed securities to investors. Currently being considered by congress, the proposal would make the transfer of assets through special purpose vehicles tax-free.
Allen & Overy (A&O) Singapore partner Kenneth Aboud believes the region to be a ripe source of securitisation instructions. He said: “We think there will be a growing need for securitisation work.” To this end, the firm has taken on Hooman Sabeti-Rahmati from Orrick Herrington & Sutcliffe to work alongside Aboud in the securitisation practice.
Thailand too has proven fertile for A&O's securitisation plans. The firm has established a working relationship with Devonshire Capital and Trinity Advisory 2001 Com-pany to provide securitisation services for medium and small enterprises.
Pises Sethsathira at A&O said: “We have chosen this structure because originators do not usually have sufficient assets individually, so they come together.”
Director of Devonshire Capital Group in Hong Kong, Oliver Hughes, said that although the Securitisation Act has been around for a while, lack of clarity and high expenses thwarted activity.
The Thai Securities and Exchange Commission has approved reforms to the Securitisation Act.
Firms looking to tap into the potential growth market need these amendments to kick-start activity among originators and investors.