CHOOSING AN SPV JURISDICTION FOR CROSS-BORDER SECURITISATION

Abstract

Introduction. The choice of the country of registration of a special-purpose vehicle (SPV) in a cross-border future-flow securitisation is conditional on the issuance route and, within a UK route, on the settlement mechanism. Foreign incorporation alone does not remove assets from the originator’s insolvency estate, and conventional weighted matrices allow favourable scores to offset defects that would prevent the transaction from being completed. Purpose. The article substantiates a reproducible two-stage model for selecting an SPV jurisdiction and applies it to future iron-ore export receivables of a Ukrainian producer under two routes: an EU-facing issue within Regulation (EU) 2017/2402 and a UK-facing listed issue. Methods. Stage 1 applies six non-compensatory admissibility conditions - asset and transaction fit, effectiveness under originator-country law, SPV integrity, lawful movement of funds, operational continuity and compatibility with the issuance perimeter; a negative result at any condition cannot be offset by a favourable score elsewhere. Stage 2 compares only alternatives with complete evidence across five weighted criteria, with the route as an explicit parameter; robustness is tested on 100,000 joint scenarios per sampling design. Results. Five conditions and four criteria are route-invariant; only the issuance-perimeter condition and the settlement criterion vary. Under the EU route Luxembourg leads with a baseline score of 4.20, ranking first in 62-71% of scenarios. A UK route does not lighten the retention and transparency duties of an EU-established securitisation special-purpose entity, so under a global note settlement is domicile-neutral, the UK route reproduces the EU result and Luxembourg leads. Jersey leads (4.15 points against 4.05) only under an assumed direct-CREST configuration, conditional on operator acceptance of the particular security. The British Virgin Islands fail the issuance-perimeter condition under the EU route but pass it under the UK route; the Ferrexpo case shows that originator viability must be tested before the country of registration is selected. Conclusion. The model structures due diligence, treats settlement as a closing condition and can be regarded as a recommendation for SPV-jurisdiction selection rather than a legal opinion on a specific transaction.