A wide range of asset classes have been securitised by Irish special purpose entities (“SPEs”) including: residential mortgages; commercial mortgages; auto loans; consumer loans; corporate loans; shipping assets; aircraft lease receivables; trade, credit card and hire purchase receivables; royalties; commodities; carbon credits/EU Allowances; and non-performing loans (“NPLs”).

Irish SPEs can be successfully utilised for the full range of securitisation products including ABS, CLOS, CMBS/RMBS and other receivables transactions.

The structure of a securitisation is generally determined by the desired regulatory capital treatment or investor requirements.

Typically, the issuer is established as an off-balance sheet, tax-neutral SPE which is funded exclusively by debt. Its key counterparties will include a local corporate services provider (“CSP”), an arranger, a note trustee, a security trustee (secured deals), a paying agent, a registrar, a transfer agent, a servicer, an originator and an investment adviser (as applicable).

The SPE is resident in Ireland for tax purposes. It acquires, holds and manages qualifying assets and has no other business.

The principal legal and regulatory regimes are as follows (each as amended, as applicable and including, in respect of EU law measures, the related Level 2 and Level 3 measures).

Corporate and Tax

• Companies Act 2014 (“Companies Act”);
• Taxes Consolidation Act 1997, as amended;
• EU (Preventive Restructuring) Regulations 2022; and
• Recast Insolvency Regulation (2015/848/EU);

Financial Services and Securities Law

• Companies Act;
• EU Securitisation Regulation (2017/2402/EU) (“SECR”);
• EU (General Framework for Securitisation and Specific Framework for Simple, Transparent and Standardised Securitisation) Regulations 2018 (“Irish Securitisation Regulations”);
• Prospectus Regulation (2017/1129/EU) (“PR”);
• EU (Prospectus) Regulations 2019 (“Irish Prospectus Regulations”);
• Market Abuse Regulation (596/2014/EU) (“MAR”), Criminal Sanctions for Market Abuse Directive (2014/57/EU) (“CSMAD”) and EU (Market Abuse) Regulations 2016 (“Irish Market Abuse Regulations”);
• Transparency Directive (2004/109/EC) (“TD”) and Transparency (Directive 2004/109) Regulations 2007 (“Irish Transparency Regulations”);
• Central Bank (Investment Market Conduct) Rules 2019;
• Listing Rules of The Irish Stock Exchange plc, trading as Euronext Dublin;
• Regulation (EC) 1060/2009 on credit rating agencies (“CRA Regulation”) and Regulation (EU) 2024/3005 on the transparency and integrity of environmental, social and governance rating activities (“ESG Ratings Regulation”);
• Central Securities Depositories Regulation (909/2014/EU) (“CSDR”);
• Regulation (EU) 2023/2631 on European green bonds (“EuGB Regulation”);
• Netting of Financial Contracts Act 1995, Financial Collateral Arrangements Directive (2002/47/EC) and the European Communities (Financial Collateral Arrangements) Regulations 2010;
• Markets in Financial Instruments Directive II (2014/65/EU) (“MiFID II”) and transposing Irish regulations;
• Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”) and transposing Irish regulations;
• European Market Infrastructure Regulation (648/2012/EU) (“EMIR”);
• Securities Financing Transactions Regulation (2015/2365/EU) (“SFTR”);
• Solvency II Directive (2009/138/EC) (“Solvency II”) (recast);
• Capital Requirements Regulation (575/2013/EU) (“CRR”), as amended by Regulation (EU) 2024/1623 (“CRR III”), and Capital Requirements Directive (2013/36/EU) (“CRD”), as amended by Directive (EU) 2024/1619 (“CRD VI”);
• Non-Performing Loans Directive (2021/2167/EU) and European Union (Credit Servicers and Credit Purchasers) Regulations 2023;
• Regulation (EU) No 1075/2013 (“FVC Regulation”) and Section 18 of the Central Bank Act 1971 (“Section 18 CBA 1971”);
• Credit Reporting Act 2013 (“CRA 2013”) and related regulations;
• Central Bank Acts 1942 to 2018 (“CBI Acts”); and
• Trustee Acts 1888 to 1989.

See also 4.2 General Disclosure Laws or Regulations in relation to MAR and TD issues and 4.7 Use of Derivatives in relation to EMIR and SFTR considerations.

See also 2.5 Servicers for credit servicing and 4.4 Periodic Reporting credit reporting issues.

Consumer and Personal Data

• Consumer Credit Act 1995 (“CCA 1995”);
• EU (Consumer Mortgage Credit Agreements) Regulations 2016 (“MC Regulations”);
• Consumer Rights Act 2022 (“CRA 2022”);
• General Data Protection Regulation (2016/679/EU) (“GDPR”); and
• Data Protection Acts 1988 to 2018 (“DPAs”).

Ireland is the leading European centre of excellence for SPEs including warehousing, securitisation, significant risk transfer/capital relief trades, repacks, receivables financing and distressed asset investment as well as a broad range of other structured finance deals.

Ireland is an onshore jurisdiction and a member of the EU and the OECD with a long-standing, trusted and transparent securitisation tax regime and an extensive network of 78 double tax treaties, which may allow for the return generated by underlying assets to be paid to an SPE with zero or reduced foreign withholding tax, no Irish stamp duty and clear VAT rules which exempt certain activities and services for VAT purposes.

It has a respected, stable and robust legal system which is ideal for complex and high-value structured finance transactions. It has the appropriate infrastructure with an excellent choice of experienced legal, tax and accounting professionals and CSPs, while Euronext Dublin facilitates efficient listing of securities. Ireland is a common law jurisdiction and therefore its legal concepts will be familiar to many market participants. Establishing an SPE in Ireland is a straightforward and inexpensive process.

As at the end of Q2 2025, there were over 3,700 active Irish SPEs holding combined assets of almost EUR1.2 trillion. This accounts for 30.6% by number of euro-area market securitisation SPEs.

The type and level of credit enhancement is typically driven by rating requirements to reduce credit risk/default risk on the underlying portfolio. Commonly utilised forms include:

• subordinated notes or loan;
• deferred purchase price;
• over-collateralisation;
• excess spread;
• liquidity facilities, credit default swaps or guarantees; and
• reserves in the form of cash and highly liquid investments.

Credit enhancement from the originator must be on arm’s length commercial terms – see the “Claw-Back” section of 6.1 Insolvency Laws.

The issuer is an SPE established solely for the purposes of the transaction, with no other business or employees. It purchases the underlying assets and issues securities to investors, who ultimately bear the economic risk on the portfolio.

See 6.2 SPEs and 4. Laws and Regulations Specifically Relating to Securitisation.

Not all securitisations will have a sponsor. In many cases, it will typically be a credit institution, often the originator, or a large corporate or a fund that establishes and manages the securitisation. An entity that acts as sponsor is subject to regulatory requirements under the SECR, as applicable.

See also:

• 4.3 Credit Risk Retention as to retention obligations;
• the “SECR” section of 4.1 Specific Disclosure Laws or Regulations;
• the “SECR Article 9(1)” section of 4.9 Banks Securitising Financial Assets; and
• the “Irish Securitisation Regulations” section of 4.1 Specific Disclosure Laws or Regulations.

The originator/seller is typically a bank, insurer or other corporate with a significant book of receivables. Either directly or through an affiliate, it advances or acquires the financial assets which will be sold to the SPE, and it may also act as servicer. It may also be a separate entity established to aggregate assets for sale to the SPE.

Originators are responsible for generating the data tape relating to the securitisation pool and for complying with the applicable risk retention and transparency requirements under the SECR, where applicable.

See also:

• 4.3 Credit Risk Retention as to retention obligations and the “sole purpose test”;
• the “SECR” section of 4.1 Specific Disclosure Laws or Regulations as to transparency and STS notification obligations;
• the “Irish Securitisation Regulations” section of 4.1 Specific Disclosure Laws or Regulations as to the CBI Notification (defined in that section); and
• 4.9 Banks Securitising Financial Assets regarding credit granting and consumer law.

Underwriters and placement agents are typically investment banks, and while it is not mandatory to appoint them, it is usual practice for public deals being widely marketed to a diverse investor base. They assist in structuring and marketing, and in a constrained fundraising environment, the underwriter will agree to purchase notes if third-party investors cannot be found.

Placement agents must comply with the market soundings regime of MAR when disclosing information on a prospective issuance to potential investors.

The servicer, often the originator/an affiliate, is responsible for the day-to-day administration of the assets. Specialist servicing companies are becoming more commonplace.

Servicers undertaking “the business of a credit servicing firm” for the purposes of the Central Bank Act 1997, as amended (“CBA 1997”) must be authorised by the Central Bank of Ireland (“CBI”). A separate authorisation is required by “credit servicers” of in-scope NPLs which were not authorised as credit servicing firms as at 30 December 2023 or otherwise exempt pursuant to the EU (Credit Servicers and Credit Purchasers) Regulations 2023.

Investors are generally financial institutions, insurance companies, pension funds, private equity investors and funds. Investors may have responsibilities under the terms of the notes and note purchase agreement or by virtue of being regulated.

Certain regulated investors will need to ensure that they perform proper due diligence in respect of the transaction under applicable SECR, US or other laws.

An institutional investor (other than an originator, sponsor or original lender) is subject, pursuant to SECR Article 5, to extensive due diligence requirements pre-investment and to ongoing obligations for the duration of its investment. This includes pre-investment verification:

• that underlying exposures were made in accordance with appropriate credit-granting criteria and processes;
• of compliance with the risk retention and (where applicable) transparency requirements of the SECR; and
• for non-performing exposures (“NPEs”), that sound standards were applied to selection and pricing.

Ongoing duties include:

• establishing appropriate and proportionate written procedures to monitor compliance with SECR Article 5 verification and due diligence requirements;
• stress-testing underlying exposures’ cash flows and collateral values or, where insufficient data is available, loss assumptions;
• ensuring internal reporting of material position risks to management to facilitate appropriate management;
• demonstrating to competent authorities a comprehensive understanding of the position and underlying exposures; and
• implementing written policies and procedures for risk management of the position.

The European Commission’s June 2025 proposals to amend the SECR seek to, amongst other things, streamline the due diligence process, including replacing the prescriptive checklist framework SECR Article 5(3)(b) with a principles-based material risk analysis tailored to the transaction and removing verification requirements for investors where the sell side is established and supervised in the EU. These are currently subject to further legislative review by the European Parliament and European Council, and further work is expected over the coming months to refine these into an agreed reform package to be implemented in 2026/27.

See also 4.3 Credit Risk Retention and the “As Investor” section of 4.6 Treatment of Securitisation in Financial Entities.

The trustee role is performed by professional trustee companies that, in certain cases, may require an Irish authorisation by the Minister for Justice as a Trust or Company Service Provider (“TCSP”). The TSCP role may be a single trustee role or it may be split between a note trustee and a security trustee role. The note trustee holds the issuer’s covenant to pay and other contractual undertakings on behalf of the noteholders. The security trustee holds the transaction security for the investors and key service providers.

Most securitisations use trustees but it is not required. The covenant to pay, contractual undertakings and transaction security can be given to noteholders directly. However, this may limit the liquidity of the notes and complicate transfers and enforcement. Some listing venues require that a trustee/independent agent represent noteholders.

See 2.7 Bond/Note Trustees.

Bankruptcy-remote transfer is generally effected by agreement between the issuer, the originator and, in order to obtain the benefit of the contract only, the trustee. An Irish court will look at the substance of the transaction and certain key provisions to examine whether it is a sham or if it is consistent with a sale.

Originator representations and warranties include status, capacity, authority, licensing and solvency. A breach of any of the foregoing would breach the relevant transaction document, may trigger an event of default and may entitle the issuer to seek rescission and/or damages. The originator provides asset warranties addressing title and compliance with selection criteria and origination rules. A breach of asset warranty may trigger a repurchase obligation.

The issuer represents and warrants as to status, capacity, authority, licensing, solvency and beneficial ownership of the portfolio. A breach of any such warranty may trigger an event of default.

See 6.3 Transfer of Financial Assets.

Perfection of Security

Within 21 days of the creation of security by an Irish company:

• the particulars must be registered with the Irish Registrar of Companies (subject to exceptions), failing which, the security is void as against any liquidator or creditor of the company; and
• if a fixed charge over the book debts, the holder must notify the Revenue Commissioners of the creation of the charge.

Where security is created by assignment, the obligor must be notified; otherwise, the assignment takes effect in equity only. Securitisation documents customarily incorporate notice to the SPE’s transaction counterparties.

An issuer covenants, amongst other things, to:

• comply with the notes and transaction documents and take reasonable steps to ensure compliance by other transaction parties;
• provide the trustee with specified documents and such information, certificates and opinions as it requires;
• prepare and deliver specified reports;
• maintain any listing;
• maintain its tax status;
• preserve the portfolio assets and deal with them only as permitted;
• not engage in any other business;
• not have employees;
• make the CBI Notification (defined in 4.1 Specific Disclosure Laws or Regulations); and
• perfect its security.

See the “Consolidation” section of 6.1 Insolvency Laws regarding separateness covenants and 6.5 Bankruptcy-Remote SPE.

Originator and servicer covenants include compliance with applicable laws and maintenance of authorisations.

Depending on the type of transaction, the issuer or originator will be designated as responsible for SECR Article 7 reporting. Where the issuer is so designated, it will delegate performance to one or more transaction counterparties.

Breach of covenant will constitute a breach of the transaction documents and, potentially, an event of default.

Servicers manage day-to-day administration, including collections and enforcement. The transaction documents typically require replacement upon servicer insolvency or material breach of obligations. Where the originator is servicer, it must treat portfolio assets as it treats equivalent assets on its balance sheet.

See also 2.5 Servicers and 4.4 Periodic Reporting.

Standard issuer events of default are failure to pay principal/interest within any applicable grace period, breach of transaction documents, insolvency and illegality. Default under the notes typically entitles the noteholders to instruct the trustee to declare the notes immediately due and payable and to enforce transaction security.

Indemnification scope is a matter of negotiation and risk appetite. Issuers usually provide full indemnities to trustees, agents, CSPs and managers/arrangers in respect of losses and costs incurred in performing their roles.

Indemnities to issuers include:

• from the originator/seller for losses incurred on assets not complying with eligibility criteria at purchase; and
• from agents, the CSP and the servicer for losses incurred due to such party’s failure to comply with obligations.

Trustees, prior to taking enforcement and other actions, may require pre-funding, indemnification and/or additional security from the noteholders.

Securitisation notes are constituted by a trust deed between the issuer and the trustee. The trust deed schedules the form(s) of notes and their terms, which together govern the relationships between the issuer, the trustee and the noteholders.

Principal provisions include payment, priority, default and remedies, modification, liability and indemnity, and responsibility for compliance with specified regulatory requirements.

Typically, a single global note represents each class of note. The global note is prepared in “classic” form or “new” form and deposited with, respectively, a common safekeeper or a common depositary. The common safekeeper/common depositary is the legal owner of the note. Noteholders hold beneficial interests via a clearing system. A global note sets out limited conditions in which it may be exchanged for definitive notes.

See the “CSDR” section in 4.14 Other Principal Laws and Regulations.

Interest rate and/or FX swaps are used to hedge the risk of interest rate and/or currency mismatch as between receivables and payments to be made to noteholders and other transaction counterparties.

See also 5.1 Synthetic Securitisation Regulation and Structure.

A typical securitisation involves the preparation by the issuer of a prospectus or a listing particulars.

Regarding prospectuses, see the “Prospectus Regime” section of 4.2 General Disclosure Laws or Regulations.

An issuance of listed notes outside the PR regime requires a listing particulars compliant with the rules of the relevant exchange. Euronext Dublin’s GEM is an exchange-regulated market and a multilateral trading facility (“MTF”) for MiFID II purposes.

The specific disclosure measures for securitisation are (each as amended and as applicable):

• SECR and related technical standards;
• Irish Securitisation Regulations; and
• FVC Regulation and Section 18 CBA 1971.

SECR

The SECR imposes harmonised rules on due diligence, risk retention and disclosure for in-scope securitisations. It provides a framework for simple, transparent and standardised (“STS”) securitisations, including STS synthetic and NPE securitisations.

Transparency requirements – SECR Article 7

SECR Article 7 requires the originator, sponsor and SPE to provide detailed information concerning the securitisation to investors, national competent authorities (“NCAs”) and, upon request, potential investors. They may designate one entity amongst themselves – commonly, the SPE – to undertake this reporting but remain jointly responsible for compliance. Obligations (as further specified in technical standards) include making available:

• quarterly (or monthly for ABCP securitisations) asset-level information on underlying exposures and investor reports;
• underlying documents essential to understanding the transaction;
• a transaction summary for private deals;
• the STS notification (if applicable);
• inside information to be disclosed under MAR; and
• outside MAR, details of significant events that may materially impact performance.

Disclosures for public deals must be made via securitisation repository. For private deals, the European Securities and Markets Authority’s (“ESMA”) Q&A on the SECR permits disclosure using any arrangements that meet the conditions of the SECR, barring any instructions or guidance to the contrary from NCAs. As the CBI has issued no such guidance, parties reporting to it use the same channels of communication as for CBI Notifications (defined below).

Reforms to the SECR’s disclosure regime, including streamlining of templates, are expected in 2026/27.

Additional transparency requirements – STS securitisations

Originators and sponsors of STS securitisations must provide additional pre-pricing disclosures, including for potential investors, historical default and loss performance data on substantially similar exposures to those being securitised and liability cash flow models.

For STS securitisations of residential loans or auto loans or leases, disclosures must address the environmental performance of the assets financed by the securitisation; or, by way of derogation, the principal adverse impacts of the assets financed on “sustainability factors” for the purposes of the Sustainable Finance Disclosure Regulation (2019/2088/EU).

STS securitisations must be notified to ESMA, via ESMA’s STS Register for traditional securitisations and, until further notice, via email for synthetic securitisations. The notification details how the transaction is STS-compliant. A third-party verifier may be engaged to attest compliance but the originator/sponsor and SPE are responsible for the information.

Synthetic risk retention disclosure

Risk retention for the purposes of SECR Article 6(3) via synthetic or contingent means must be disclosed and described in the offering document and transaction summary/overview.

Irish Securitisation Regulations

The Irish Securitisation Regulations require an Irish situate originator, sponsor or SPE to notify the securitisation to the CBI within 15 working days of the first issuance (“CBI Notification”). This notification must include:

• the relevant International Securities Identification Number(s);
• details of the person making the notification; and
• details of the entity designated to comply with SECR reporting obligations.

It must be submitted via the channel specified on the CBI’s SECR webpage.

FVC Regulation and Section 18 CBA 1971

See the “Statistical Reporting” section of 4.4 Periodic Reporting.

Relevant general disclosure measures include the following (each as amended, as applicable and including, in respect of EU law measures, the related Level 2 and Level 3 measures):

• Companies Act;
• PR and Irish Prospectus Regulations;
• MAR, CSMAD and the Irish Market Abuse Regulations;
• TD and the Irish Transparency Regulations;
• SECR;
• Central Bank (Investment Market Conduct) Rules 2019;
• CSDR;
• SFTR;
• EMIR;
• Protected Disclosures Act 2014;
• EuGB Regulation;
• EU (Anti-Money Laundering: Beneficial Ownership Of Corporate Entities) Regulations 2019; and
• European Single Access Point Regulation (2023/2859/EU) (“ESAP Regulation”).

Prospectus Regime

A PR-compliant prospectus, approved by the relevant NCA, is generally required where securities are admitted to trading on a regulated market or offered to the public. Exemptions include offers:

• addressed solely to qualified investors;
• addressed to fewer than 150 natural/legal persons per EU member state, other than qualified investors;
• with a minimum denomination of EUR100,000; and
• secondary issuances representing less than 30% (20% prior to the Listing Act) of the number of securities already admitted to trading on the relevant regulated market.

Securitisation issuers rarely offer securities to the public in the true sense. The obligation to publish a prospectus is usually triggered by listing on a regulated market. The prospectus must satisfy both prospectus law and the stock exchange rules.

A prospectus must contain all information material to an investor’s informed assessment of the issuer, any guarantor, the securities, the reasons for the issuance and impact on the issuer.

Prospectus risk factors must be specific to the issuer or securities and material to an informed investment decision. Listing Act changes to the PR prohibit generic and disclaimer-type risk factors (aligning with prior ESMA guidance) remove the risk factor ranking rule. Detailed requirements are specified by technical standards.

The prospectus regime is due to be further simplified as the remaining Listing Act provisions take effect. However, some amendments may be delayed by the European Commission’s deprioritisation programme announced in October 2025.

Market Abuse Regime

The market abuse regime prohibits insider dealing, unlawful disclosure of inside information and market manipulation in respect of in-scope financial instruments, including instruments:

• admitted to trading/for which admission is sought on a regulated market or MTF; and
• the value or price of which depends, or has an effect, on any of the above.

Issuers must publish as soon as possible inside information which directly concerns the issuer in a manner which enables the public’s complete and timely assessment. Disclosures cannot be combined with marketing information and must remain on the issuer’s website for at least five years. Disclosure can be delayed in limited circumstances provided that confidentiality can be maintained. Listing Act changes will apply a new framework for delayed disclosure of intermediate steps in a protracted process from June 2026.

Transparency Regime

The Irish Transparency Regulations specify disclosure requirements for periodic financial information and ongoing information by issuers of securities admitted to trading on a regulated market. Annual financial reports of retail debt securities issuers must use the European Single Electronic Format.

EuGB Regulation

European green bond (“EuGB”) issuers must disclose in prescribed form:

• pre-issuance, a factsheet; and
• post-issuance:
1. an annual allocation report until the issuance proceeds are fully allocated; and
2. at least once during the EuGB’s lifetime, a report on the environmental impact of the use of the issuance proceeds.

The factsheet and allocation report must, and the impact report may if the issuer wishes, be reviewed by an external reviewer. All disclosures and related external reviews remain on the issuer’s website until maturity.

ESAP Regulation

The ESAP Regulation established a central access point for information published pursuant to specified financial services and sustainability measures. The ESAP is due to start collecting and publishing information in July 2026 and July 2027, respectively.

See the “EMIR Regime” and “SFTR Regime” sections of 4.7 Use of Derivatives.

SECR retention rules mandate that an originator, sponsor, original lender or, for an NPE securitisation and subject to conditions, the servicer retains at least 5% credit risk in the securitised assets without mitigation for the duration of the transaction. This is most commonly satisfied by retention of:

• at least 5% of the nominal value (or discounted purchase price for NPEs) of each tranche; or
• the most subordinated payment obligation in the securitisation.

Certain investors must verify compliance pre-investment.

Delegated Regulation (EU) 2023/2175 (“Risk Retention RTS”) specifies the risk retention requirements in further detail, including the so-called “sole purpose test”. This test was the subject of unexpected commentary from the European Supervisory Authorities in March 2025 stipulating that a 50% threshold should be applied when assessing the sole or predominant source of revenue of a retention holder.

Sanctions

Possible sanctions for negligent or intentional contravention of the SECR or Irish Securitisation Regulations include:

• administrative fines for corporates of up to 10% of annual turnover;
• bans from participating in the management of any originator, sponsor or SPE; and
• temporary withdrawal of authorisation from the entity responsible for confirming compliance with STS requirements.

Sanctions may be imposed on regulated financial service providers under the Central Bank Act 1942, as amended (“CBA 1942”) for contraventions of the Irish Securitisation Regulations. Criminal liability may also attach to relevant parties.

See:

• the “SECR” and “Irish Securitisation Regulations” sections of 4.1 Specific Disclosure Laws or Regulations;
• the “Transparency Regime” section of 4.2 General Disclosure Laws or Regulations; and
• the “Sanctions” section of 4.3 Credit Risk Retention.

Statistical Reporting

Financial vehicle corporations (“FVCs”) must report quarterly statistical data to the CBI under the FVC Regulation. An EU entity is an FVC if its principal activity involves (i) securitisation where it is insulated from risk of originator bankruptcy and other default; and (ii) issuing “financing instruments” (including securities and derivatives) and/or owning assets underlying financing instruments that are offered to the public or privately placed.

Many Irish SPEs are FVCs. Under Section 18 CBA 1971, non-FVC Irish SPEs provide quarterly balance sheets and annual profit and loss data to the CBI.

Credit Reporting

The CBI operates a centralised repository (Central Credit Register, or “CCR”) for information on in-scope credit arrangements including loans, mortgages and hire purchase agreements originated in Ireland. The CRA 2013 requires, amongst other things, that in-scope lenders (including SPEs that acquire loan portfolios) provide monthly detailed and ongoing information on the performance of in-scope credit arrangements to the CBI.

A person who provides false information to the CBI may be liable to a fine (of unspecified amount) and/or up to five years’ imprisonment. The CBI’s sanctions regime applies in respect of breaches by regulated entities of the CRA 2013.

Financial reporting, including audited annual financial statements, is also required under Irish company law.

The CRA Regulation and related measures established a regulatory framework for credit rating agencies (“CRAs”) in the EU. It requires, amongst other things, that CRAs:

• be registered with and supervised by ESMA;
• are independent and properly identify, manage and disclose conflicts of interest;
• maintain effective internal control structures; and
• apply sound rating methodologies.

EU financial institutions can only use for regulatory purposes credit ratings that have been issued (i) by a CRA registered with ESMA; (ii) in a third country and endorsed by a registered CRA; or (iii) by a third-country CRA certified by ESMA; and, in the case of (ii) and (iii), subject to conditions.

Securitisation issuers must seek ratings for each tranche from at least two CRAs and consider appointing a CRA with a market share of less than 10%.

ESMA has published non-binding guidelines for CRAs, including on internal controls and disclosure requirements, and may impose fines for negligent or intentional infringement.

The CRA also incorporates a civil liability framework.

The European Commission has proposed amendments to the CRA Regulation to ensure that CRAs appropriately and transparently address ESG matters.

ESG Ratings Regulation

The ESG Ratings Regulation will apply to ESG ratings issued by ESG ratings providers operating in the EU from 2 July 2026 and certain third-country entities depending on the circumstances. Key aspects include requiring providers to register with ESMA, separating certain business activities to avoid conflicts of interest, and mandating transparency about their methodologies and sources. Non-EU providers must obtain an endorsement from an EU-authorised provider or be recognised based on an equivalence decision in order to operate in the EU.

The prudential treatment of a securitisation position is principally determined for credit institutions and investment firms under the CRR and for insurers and reinsurers under Solvency II. This response focuses on the CRR.

As Originator

An originator which is a credit institution or an investment firm can exclude securitised exposures from the calculation of its risk-weighted exposure amounts (and, if using the IRB approach, expected loss amounts) where the securitisation satisfies the requirements of CRR Articles 244 (for traditional securitisation) and 245 (for synthetic securitisation).

In summary, the originator must either (i) achieve significant risk transfer (in accordance with the CRR and related technical standards) or (ii) apply a 1,250% risk weight to positions held or deduct them from its CET1. Tailored rules apply for NPE securitisations.

As Investor

Preferential treatment may be available for:

• positions in STS securitisations that satisfy the requirements of CRR Article 243;
• positions in qualifying traditional NPE securitisations (other than where the external ratings-based approach is applied) in accordance with CRR Article 269a; and
• qualifying senior positions in STS synthetic securitisations in accordance with CRR Article 270.

Positions in STS securitisations complying with Article 13 of the LCR Delegated Regulation (2015/61/EU) qualify as Level 2B high-quality liquid assets (L2BHQLA) under the CRR, up to a maximum of 15% of the holder’s liquidity buffer. The European Commission consulted in June 2025 on targeted changes to the liquidity buffer rules, including lowering the minimum rating requirements and recalibrating haircut rules.

The European Commission also published proposals for extensive amendments to the CRR’s treatment of securitisation in June 2025. Work at the Council and Parliament is ongoing in relation to implementing reform of SECR to facilitate greater securitisation activity in the EU as part of the Savings and Investment Union ambitions.

See also 4.3 Credit Risk Retention.

The principal rules on derivatives in securitisations are contained in the following measures (each as amended, as applicable and including, in the case of EU law measures, the related Level 2 and Level 3 measures).

• EMIR (including in particular amendments made by Regulation (EU) 2019/834 (“EMIR Refit”) and Regulation (EU) 2024/2987 (“EMIR 3.0”);
• EU (European Markets Infrastructure) Regulations 2014 (“Irish EMIR Regulations”);
• SFTR; and
• EU (Securities Financing Transactions) Regulations 2017.

EMIR Regime

EMIR applies to EU financial counterparties (“FCs”), non-financial counterparties (“NFCs”) and certain third-country entities where transactions have direct, substantial EU effects. Key obligations are mandatory clearing, risk mitigation for uncleared over-the-counter (“OTC”) derivatives, and reporting/record-keeping for all derivatives. Clearing applies to FCs (other than small financial counterparties (“SFCs”)) and to NFCs above asset class thresholds (“NFC+”) introduced by EMIR Refit. All in-scope derivatives must be reported, and for OTC trades between an FC and an EU NFC (that is not an NFC+), the FC is responsible for reporting and accuracy.

In STS traditional securitisations, the SPE may use derivatives only to hedge interest-rate or currency risk. Such hedges must be clearly documented and not included in the asset pool other than for hedging purposes.

Enforcement

The Irish EMIR Regulations empower the CBI to:

• issue directions and contravention notices;
• appoint assessors to investigate suspected contraventions; and
• impose sanctions, including monetary penalties of up to EUR2.5 million.

Criminal liability may also attach.

SFTR Regime

An SPE constituting an NFC under SFTR may be subject to additional trade reporting obligations in respect of its securities financing transactions (“SFTs”) not falling within the scope of EMIR. If in scope for SFTR, an SFT counterparty must report the transaction details and any modification or termination thereof to a registered or recognised trade repository no later than the working day following the transaction, modification or termination. An SFT counterparty may delegate its reporting obligation.

SFTR also imposes conditions on the reuse of financial instruments received as collateral.

Enforcement

Sanctions available to the CBI include:

• issuing orders and contravention notices; and
• imposing administrative sanctions of at least three times the amount of profits gained or losses avoided.

The CBI’s administrative sanctions regime under the CBA 1942 may also be applied in respect of contraventions by regulated entities.

Investors are afforded protection under the following measures:

• SECR disclosure requirements allow investors to diligence and monitor securitisations.
• PR disclosure requirements aim to provide “necessary information which is material to an investor” making investments.
• MAR aims to prevent insider dealing and market manipulation.
• The Irish Transparency Regulations provide minimum disclosure standards for information concerning issuers of securities admitted to trading on regulated markets.
• EuGB disclosure and transparency requirements mitigate against greenwashing in respect of EuGBs.

The ESAP Regulation will further enhance investor protection.

See 4.1 Specific Disclosure Laws or Regulations, 4.2 General Disclosure Laws or Regulations and 4.4 Periodic Reporting.

As Originator

A bank securitising its assets must consider rules governing the origination and servicing which vary depending on asset class and borrower type. Banks typically warrant compliance with relevant measures up to the date of transfer with breach of warranty triggering a repurchase obligation. Of particular relevance for banks are SECR credit-granting criteria and consumer and data protection laws.

SECR Article 9(1)

Originators, sponsors and original lenders must apply the same “sound and well-defined” credit-granting criteria both to exposures that will be securitised and to non-securitised exposures pursuant to SECR Article 9(1), subject to exceptions. An originator which acquires exposures for its own account and subsequently securitises them must verify compliance by the original lender, and for acquired NPEs, that sound standards were applied in selection and pricing. Verification should be undertaken by the originator at the time of acquisition.

Consumer protection

The Irish consumer protection regime was substantively revised by the CRA 2022, which transposed, amongst other things, the Digital Content Directive (2019/770/EU) and the Omnibus Directive (2019/2161/EU). It also amended and extended the Consumer Protection Act 2007, which prohibits unfair, misleading, aggressive and prohibited commercial practices and applies to all Irish law consumer contracts.

Parts 4 and 6 of the CRA 2022 replaced the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 to 2000. The new measures apply to, amongst other things, contracts for the supply of services to consumers, including loans. The CRA 2022 also extended the Unfair Terms in Consumer Contracts “grey list” of terms presumed to be unfair and introduced a new “black list” of terms which are always unfair. Contractual terms which are unfair are unenforceable against consumers.

The Consumer Protection Code 2012 specifies how regulated entities must deal with “personal consumers” and “consumers”. It will be replaced in March 2026 by the Consumer Protection Code 2025, which addresses consumer protection and standards for business and aims to enhance existing protections for consumers.

Mortgage loans are principally governed by the CCA 1995 and the MC Regulations. The CCA 1995 imposes rules on advertising, provision of information and mandatory warnings. The MC Regulations include obligations to verify a borrower’s creditworthiness before lending, explain prescribed information and act in the borrower’s best interests when advising on mortgage loans.

The Code of Conduct on Mortgage Arrears 2013 concerns management of arrears and pre-arrears in respect of a borrower’s principal dwelling or sole Irish residential property.

Banks will also be bound by the Second Consumer Credit Directive (2023/2225/EU) and the Distance Marketing Directive (2023/2673/EU), which are yet to be fully transposed in Ireland.

Data protection laws

Personal data of borrowers must be safeguarded as per the GDPR, the DPAs and SI 336/2011 (“Irish ePrivacy Regulations”).

See 4.6 Treatment of Securitisation in Financial Entities.

See the “Claw-Back” section of 6.1 Insolvency Laws and the “Form and Structure” section of 6.2 SPEs for considerations as to the form of SPE. See 7.1 Transfer Taxes and 7.2 Taxes on Profit regarding Section 110 companies.

Securitisations are structured such that SPE activities are not characterised as banking, writing insurance, carrying on business as a retail credit firm or MiFID II-governed activities.

Banking

Engaging in banking business and acceptance of deposits or other repayable funds from the public requires:

• an appropriate licence or authorisation from the CBI under the Central Bank Act 1971, as amended (“CBA 1971”) or the European Central Bank under Regulation (EU) 1024/2013, respectively; or
• a passported authorisation/licence.

Failure to hold the appropriate licence or authorisation is an offence punishable by a fine and/or up to five years’ imprisonment.

CBA 1971 Section 7(2) provides that a person or body corporate is deemed to hold themselves out as a banker if, amongst other things, their name includes any of the words “bank”, “banker” or “banking” or analogous words.

CRD VI implications of lending to Irish SPEs

CRD VI, when implemented, will require non-EU undertakings to establish an authorised EU branch or relevant EU subsidiary to commence or continue carrying out certain core banking activities in an EU member state, unless an exemption applies. EU member states must transpose CRD VI by 10 January 2026, with the requirements for establishment and authorisation of a branch in the EU applying from 11 January 2027.

Currently, lending to Irish corporates does not in itself require a financial services authorisation or licence. With the introduction of the CRD VI branch requirement, non-EU undertakings will have to assess whether their EU lending to Irish SPEs is impacted and consider the steps, including any available exemptions or restructuring options, required to address the requirements.

Insurance

An insurance company operating in Ireland must hold an authorisation from the CBI or appropriate authority in its home member state if passporting into Ireland.

Retail Credit Firms

A person who provides cash loans, a deferred payment or similar financial accommodation directly or indirectly to, or enters into a consumer-hire agreement or hire-purchase agreement with, natural persons (other than professional clients under MiFID II or another regulated financial services provider) must be authorised as a “retail credit firm” under the CBA 1997.

Certain activities are exempted, including the purchase of loans originated by another party (unless credit is subsequently provided) and the provision of credit on a once-only/occasional basis. The provision of this credit must not involve a representation, or create an impression, that the credit would be offered to other persons on the same or substantially similar terms. Subject to conditions, an SPE established by a “regulated credit entity” (eg, a bank) for the securitisation of, amongst other things, rights in credit agreements, will not be treated as a retail credit firm.

Failure to obtain authorisation is an offence punishable by a fine of up to EUR100,000. For regulated entities, the CBI’s administrative sanctions regime may also be applied in respect of any breach of the retail credit provisions of the CBA 1997.

MiFID II

An entity which is an “investment firm” and which provides “investment services” must be authorised or recognised for such purposes pursuant to MiFID II. Investment services include portfolio management and execution of orders. An SPE will appoint a portfolio or collateral manager to provide these services in relation to its assets as required.

See 3.5 Principal Servicing Provisions.

Irish government-sponsored entities have not yet participated in the securitisation market. Subject to their internal rules, there is no restriction on doing so.

The diverse investor base for securitisations includes credit institutions, pension funds, insurance undertakings and investment funds.

In addition to the rules on due diligence (see 4.3 Credit Risk Retention) and capital treatment (see the “As Investor” section of 4.6 Treatment of Securitisation in Financial Entities), entities investing in securitisations are prohibited from re-securitising their securitisation positions by SECR Article 8. Additional rules may be applicable to investors that are regulated.

Schedule 2 Firms

Unregulated entities which perform certain activities listed in CJA 2010 Schedule 2 (including commercial lending, factoring and financial leasing) must register as “Schedule 2 firms” with the CBI as competent authority for the anti-money laundering (“AML”) regime in Ireland.

Registration is not required where:

• the entity is engaged only in trading for its own account or the account of customers that are members of its group, in certain financial instruments; and
• its annual turnover is less than EUR70,000 and its Schedule 2 activities are below specified thresholds.

A Schedule 2 firm must:

• perform certain AML/“know your customer” activities as relevant in accordance with robust AML policies and procedures; and
• advise the CBI of any change to its Schedule 2 activities, ownership or corporate information, of any subsequent authorisation or licensing, and of any other material matter.

Many Irish SPEs are Schedule 2 firms.

EuGB Regulation

The EuGB Regulation prescribes uniform requirements for debt issuers that wish to apply the designation “EuGB” or “European green bond” to their bonds. The designations are available only for public issuances (other than synthetic securitisations) and certain debt issued or guaranteed by sovereigns and public bodies.

The measure adopts a “green proceeds” approach, with issuance proceeds to be invested prior to maturity in accordance with Article 3 of the Taxonomy Regulation (2020/852/EU), subject to a degree of flexibility for sectors and activities not currently within the scope for the Taxonomy Regulation.

Modified requirements apply to securitisations, with the originator being responsible for complying with the majority of obligations specified for issuers, “proceeds” being the funds raised from sale of the securitised assets to the SPE and a sharing of obligations between originators in a multi-originator structure.

CSDR

CSDR operates to enhance the safety and efficiency of the settlement system in the EU by regulating central securities depositories (“CSDs”) and applying settlement rules for market operators, including electronic book-entry format for securities admitted to trading or traded on trading venues and settlement discipline.

CSDR has required since 1 January 2023 that all newly issued transferable securities admitted to trading in the EU be held in book-entry form through a CSD and, since 1 January 2025, that all existing such transferable securities be represented in book-entry form. Book-entry form representation may be achieved “subsequent to a direct issuance in dematerialised form” or by immobilisation through a CSD.

Immobilisation and dematerialisation may not reduce the rights of security holders and should be implemented in a way that ensures that holders of securities can verify their rights.

CSDR also mandates the transition from T+2 to T+1 settlement, which will apply from 11 October 2027.

Synthetic securitisations are permitted in Ireland and are used primarily to transfer the credit risk of exposures held on-balance sheet by credit institutions to third parties. They are also used to arbitrage between a higher spread received on an underlying asset and a lower spread paid on related structured securities. Ireland is a leading jurisdiction for off-balance sheet credit-linked note issuers and synthetic securitisations and risk-sharing arrangements for European banks.

See the “As Investor” section of 4.6 Treatment of Securitisation in Financial Entities.

Regulation

Synthetic securitisations are regulated in the same manner as traditional securitisations, as described in 4. Laws and Regulations Specifically Relating to Securitisation.

See the “As Investor” section of 4.6 Treatment of Securitisation in Financial Entities. 4.7 Use of Derivatives also applies to credit derivatives in synthetic securitisations. EMIR provisions on margining may also apply where the issuer’s transactions in OTC derivative contracts exceed EMIR clearing thresholds.

Issuers and originators in Ireland are subject to the general insolvency law, which incorporates the Preventive Restructuring Directive (2019/1023/EU). Well-established structures insulate the underlying assets from the balance sheet (and insolvency) of the originator. See 6.3 Transfer of Financial Assets.

While there has been an increase in synthetic securitisations in recent years, Irish securitisations of receivables are typically structured as “true sales”.

True sale transactions are subject to two principal risks in originator insolvency:

• recharacterisation of the sale as a secured loan; and
• claw-back.

Both true sale and synthetic securitisations may be impacted by rules on consolidation of assets, avoidance of certain contracts and examination of companies.

Recharacterisation as Secured Loan

True sale

A purported true sale may in certain circumstances be recharacterised by an Irish court as a secured loan. In determining the legal nature of a transaction, a court considers its substance as a whole, including economic features and the parties’ intentions, and irrespective of any labels. Irish law endorses the principles set out in the English case law. A sale transaction will generally be upheld unless it is:

• in substance, a security arrangement (eg, the transaction documents do not indicate a sale); or
• a sham (eg, the transaction documents do not reflect the parties’ intentions).

Consequences of recharacterisation

A security interest created by an Irish company will generally be void unless registered within 21 days of creation – see 3.3 Principal Perfection Provisions. Consequently, a true sale which is recharacterised as a secured loan could constitute an unregistered security interest of the originator and render the issuer its unsecured creditor as regards the assets.

The issuer would rank pari passu with other unsecured creditors and behind the claims of secured and preferential creditors and insolvency-related costs and fees.

Claw-Back

Several provisions of Irish company law entitle a liquidator to seek to set aside pre-insolvency transfers.

Unfair preference

Any transaction in favour of a creditor of a company which is unable to pay its debts as they become due which takes place during the six months prior to the commencement of its winding-up, and with a view to giving that creditor a preference over other creditors, constitutes an unfair preference and is invalid subject to certain exceptions. Case law indicates that the company must have a dominant intent to prefer one creditor over its other creditors.

An originator certifies its solvency at closing, preventing any question of unfair preference arising as regards the securitisation.

The six-month period is extended to two years for transactions in favour of “connected persons” (defined in Section 2(1) of the Companies Act).

Invalidity of floating charge

Subject to limited exceptions, a floating charge on the property of a company created during the 12 months before the commencement of its winding-up is invalid unless it is proved that the company, immediately after the creation of the charge, was solvent. A floating charge created in connection with an scheme of arrangement will not be declared invalid on the basis of detriment to the general body of creditors unless there are other reasons for so doing. The 12-month period is extended to two years if the chargee is a connected person.

Disclaimer of onerous contracts

A liquidator may, with leave of the court, at any time within 12 months of the commencement of the liquidation, disclaim any property of a company being wound up which consists of unprofitable contracts or any property that is unsellable or not readily saleable.

Consolidation

Irish courts have a limited jurisdiction to consolidate assets where they are satisfied that it is just and equitable to do so. An Irish court may, in certain circumstances, order that two or more “related companies” that are being wound up are treated as one company and wound up accordingly.

An Irish court may also order the related company to contribute to the whole or part of the provable debts in the winding-up. The court must consider, as regards the related company, amongst other things:

• its involvement in the management of, and conduct towards creditors of, the company being wound up; and
• the likely effect of a contribution order on its own creditors.

The use of an orphan SPE and compliance with separateness covenants reduce the likelihood of an issuer or originator being made subject to such orders.

Irish law does not include the doctrine of substantive consolidation.

Examinership and SCARP

Examinership and the Small Companies Administrative Rescue Process (“SCARP”) are protection procedures under the Companies Act to facilitate the survival of Irish companies in financial difficulty which can have an impact on creditors. Generally speaking, the prevailing view is that it would not be feasible for an SPE to avail itself of these regimes. Non-petition provisions in transaction documents seek to prevent this as regards an SPE.

Credit Institutions

Where an insolvent originator is a bank, Irish and EU rules on resolution and recovery and the CBI Acts are also relevant.

An Irish SPE is structured as a bankruptcy-remote orphan company and formed as a private limited company (“LTD”), a designated activity company (“DAC”) or a public limited company (“PLC”). Its issued share capital is held on trust by a professional trustee for charitable purposes.

The form chosen will depend on the type of securities to be issued and whether or not they will be listed. An LTD can issue unlisted notes falling within the “excluded offer” exemption under the PR. A DAC can issue both listed and unlisted notes falling within the excluded offer exemption. Only a PLC may offer securities to the public (retail), other than pursuant to an excluded offer and/or list securities other than debentures. Most securitisations involve the issuance of listed debt securities by a DAC.

The board of directors of the SPE should comprise at least two independent persons. A CSP will usually provide the SPE’s independent directors, company secretary, registered office and various reporting services. Ideally, a minimum of four board meetings should be held per year in Ireland, with the majority of the directors being physically present. The SPE’s contractual relations are structured on a non-petition, limited recourse and arm’s length basis. Its constitution may also contain restrictions.

SPV separateness clauses are used to minimise the risk of consolidation on originator insolvency.

Non-issuer transaction parties will be bound by limited recourse and non-petition provisions in respect of the issuer.

Requirements of Valid Transfer – Perfection

An Irish securitisation of receivables is typically structured as a true sale via assignment from the originator directly, or through an intermediary vehicle, to the issuer. A true sale may also be achieved by declaration of trust, sub-participation or novation. These methods are generally employed only where an assignment is not feasible and are not discussed below.

A valid legal assignment of a debt must be:

• absolute;
• in writing and signed by the assignor;
• for the entire amount of the debt; and
• expressly notified in writing to the debtor.

Assignments not meeting the above requirements take effect in equity only. Both legal and equitable assignments can execute a true sale. Most Irish securitisations use equitable assignments (achieved by omitting notification to the obligors). The issuer (or trustee) may, upon the occurrence of certain trigger events (eg, originator insolvency) perfect the assignment by notifying the obligors.

Prior to perfection, an equitable assignee is exposed to certain risks vis-à-vis the underlying obligors due to the lack of direct contractual nexus with them. The transaction documents seek to mitigate these risks via undertakings and a power of attorney from the originator/seller to the issuer.

Additional perfection requirements apply for certain asset classes.

True Sale

See the “Recharacterisation as Secured Loan” section of 6.1 Insolvency Laws. A legal opinion confirms the effectiveness of the sale and, subject to certain factual assumptions and qualifications, that such sale is not liable to be recharacterised as a secured loan.

If assignment is not possible, an originator may declare a trust over the assets in favour of the SPE. The SPE obtains an equitable interest in the assets and remains subject to the risks set out in the “Requirements of Valid Transfer – Perfection” section of 6.3 Transfer of Financial Assets.

A trust is validly constituted where there is certainty as to the intention to create the trust, the subject matter and the beneficiaries. A legal opinion will confirm that the trust satisfies these requirements subject to certain factual assumptions.

An SPE is typically established as an orphaned bankruptcy-remote entity, with its shares held by an independent share trustee on trust for charitable purposes. The SPE will have an independent board of directors (or at least a majority of independent directors) charged with the management of the SPE. Separateness covenants can be included in the transaction documents and/or constitution of the SPE to help bolster segregating and ring-fencing its assets from the sponsor, originator or other deal parties.

The transaction documents will set out the order of priority in which the issuer’s financial obligations are to be paid ensuring that any non-deal party expenses are provided for adequately. All transaction documents will also include non-petition/limited recourse provisions so that the SPE’s liabilities cannot exceed its assets, such that the noteholders ultimately bear the economic risk of the deal.

See also:

• 3.1 Bankruptcy-Remote Transfer of Financial Assets;
• the “Consolidation” section of 6.1 Insolvency Laws; and
• 6.2 SPEs.

Stamp Duty

Irish stamp duty tax can apply on instruments of transfer which are executed in Ireland or which relate to Irish situate assets. The current rate of stamp duty on non-residential property is 7.5%, or 1% on shares in an Irish incorporated company. Several exemptions are available in respect of various financial assets including loan capital, the sale of debts in the ordinary course of business which do not relate to Irish real estate or Irish shares, and transfers of shares in a non-Irish incorporated company.

Where an exemption is not available, non-Irish situate assets may occasionally be transferred by way of instrument executed outside of Ireland. Novations or a transfer of economic exposure only by way of sub-participation would also be outside the remit of Irish stamp duty.

Value-Added Tax (VAT)

Irish VAT at the standard rate (23%) can apply on the supply of services. However, financial services consisting of transferring or dealing in existing stocks, shares, debentures and other securities are VAT exempt.

An SPE that qualifies as a Section 110 company is subject to Irish corporation tax at the rate of 25% on taxable profits. Section 110 companies can take advantage of Ireland’s favourable securitisation tax regime, which permits the cost of funding and other revenue expenditure, incurred wholly and exclusively for the purposes of its business, to be tax deductible (in line with a trading company).

A Section 110 company can deduct profit participating interest or interest exceeding a reasonable commercial rate of return in calculating its taxable profits (subject to conditions). Corporation tax is levied on its net taxable profit, which is generally maintained at a negligible level by matching deductible expenditure with income via a profit participating loan or note.

A Section 110 company must be Irish tax resident and carry on in Ireland a business of holding and/or managing qualifying assets (financial assets, commodities, and plant and machinery) and, apart from ancillary activities, carry on no other activities. The first assets it holds or manages must have an aggregate value of not less than EUR10 million. This is a “day-one test”. A Section 110 company must enter into transactions by way of a bargain made at arm’s length (apart from the payment of profit participating or excessive interest).

The SPE must notify the Revenue Commissioners of its intention to be a “qualifying company” within eight weeks of commencing activities.

Exceptions to Anti-Avoidance Rules

Deductions for profit participating interest are disallowed under Section 110 except where:

• the interest is paid to an Irish tax resident person or a person otherwise within the charge to Irish corporation tax;
• the interest is paid to certain pension funds or other tax-exempt bodies that are resident in a “relevant territory” (ie, an EU member state or double tax treaty country); or
• under the laws of a relevant territory, the interest is subject to a tax and that tax corresponds to Irish corporation tax or income tax and applies generally to profits, income or gains from sources outside that territory.

The anti-avoidance rules generally do not apply to transactions where the debt is issued as a quoted Eurobond or wholesale debt instrument (see 7.3 Withholding Taxes) and the investors are third-party persons otherwise unconnected with the Section 110 company.

ATAD

Ireland has hybrid mismatch legislation and an interest limitation rule (“ILR”) pursuant to the Anti-Tax Avoidance Directive (2016/1164/EU) (“ATAD”).

A noteholder should not be treated as an associated enterprise of a Section 110 company merely as a result of holding notes, meaning that in many cases payments of interest by a Section 110 company should not come within the scope of hybrid mismatch provisions.

A restriction under the ILR only applies if the borrowing costs of a relevant entity exceed interest-equivalent taxable revenues by more than 30% of EBITDA or (if greater) the de minimis amount of EUR3 million in respect of an accounting period of 12 months.

An orphan SPE which qualifies as a “single company worldwide group” can apply the “equity ratio” provision and disapply the ILR.

Minimum Tax Directive

The European Commission’s directive to implement the OECD’s draft Global Anti-Base Erosion Model Rules (“GloBE Rules”) in the EU (“Minimum Tax Directive”) introduces a minimum effective tax rate of 15% for MNE groups and large-scale domestic groups which have annual consolidated revenues of at least EUR750 million. It contains an income inclusion rule and an undertaxed profit rule (“UTPR”), which allow for the collection of top-up tax if the effective tax rate on income of an in-scope group is under 15%. The Minimum Tax Directive also allows jurisdictions to apply their own domestic minimum top-up tax.

A key concept in the Irish Pillar Two provisions, effective for accounting periods commencing on or after 31 December 2023, with the exception of the UTPR, which applies for tax years commencing on or after 31 December 2024, is a “qualifying entity”, being a member located in Ireland of an MNE group (or large-scale domestic group) which has consolidated revenues of more than EUR750 million in at least two out of the previous four accounting periods The Irish Pillar Two provisions can also apply a top-up tax to entities that are not part of a consolidated group with annual revenues of at least EUR750 million in at least two out of the previous four accounting periods.

If an SPE is at or above the EUR750 million revenue threshold on a consolidated or standalone basis for at least two of the preceding four accounting periods and its effective tax rate is lower than the minimum tax rate of 15%, it may be chargeable to the Irish domestic top-up tax.

The Irish Pillar Two provisions exclude a securitisation entity (as defined) where there are other constituent entities of the in-scope group in Ireland that are not themselves securitisation entities. Where applicable, any domestic top-up tax liability of the Irish securitisation entity is imposed on the other constituent entities of the in-scope group in Ireland and not charged on the securitisation entity itself. If, however, there are no other constituent entities of the in-scope group in Ireland, or all other constituent entities are securitisation entities, the exemption from the charge to domestic top-tax for the securitisation entity will not apply.

Irish withholding tax applies at the rate of 20% to payments of yearly interest which have an Irish source.

A number of exemptions are available to Section 110 companies, including:

• the “quoted Eurobond” exemption for securities quoted on a recognised stock exchange (subject to conditions);
• where interest is paid by a Section 110 company to a person tax resident in an EU member state (other than Ireland), or in a country with which Ireland has signed a double tax treaty; and
• the “wholesale debt” exemption, which applies to debt instruments which are issued in denominations of not less than EUR500,000 and which mature within two years (subject to conditions).

Where interest is profit participating or represents more than a reasonable commercial return, a Section 110 company may only claim a tax deduction for the interest if certain conditions are met (see discussion in the “Exceptions to Anti-Avoidance Rules” section of 7.2 Taxes on Profit).

Outbound Payments

The outbound payments legislation can disapply existing domestic withholding tax exemptions to certain Irish-source outbound payments of interest, royalties and distributions. To be in scope, the payment must be made by a company to an associated entity that is resident in a jurisdiction on the EU list of non-cooperative jurisdictions, or in a “no-tax” or “zero-tax” jurisdiction. Where applicable, withholding tax at the standard rate applicable to a payment of interest, dividends or royalties as appropriate will apply.

The measures do not apply to payments by an Irish company such as an SPE to non-associated entities.

The activities of a Section 110 company are often exempt from Irish VAT. However, if the Section 110 company’s investments are located outside of the EU, partial VAT recovery may be available. Specific exemptions apply in relation to investment management and corporate administration services provided to a Section 110 company. Legal and audit services provided to a Section 110 company in Ireland are subject to VAT.

If a Section 110 company receives taxable services from outside of Ireland, it will be obliged to register and self-account for Irish VAT on those services on the reverse-charge basis.

Legal opinions are generally provided by issuer counsel. They typically address:

• whether the issuer meets the conditions to qualify for the Irish securitisation tax regime;
• whether interest on the debt securities is deductible for Irish tax purposes and can be paid by the issuer free from withholding tax;
• whether stamp duty arises in connection with the entry into of the transaction documents; and
• VAT opinions (eg, that the services of the investment manager and CSP to the issuer are exempt from Irish VAT).

Accountancy professionals undertake the accounting analysis including balance sheet treatment of securitised assets and consolidation for accounting purposes of the SPE into the originator’s group. Securitised assets may be considered on-balance sheet for accounting purposes and off-balance sheet at law.

No legal advice is provided on accounting matters.