Guidance

1. An Authorised Person is deemed to have effective control over the transferred Exposures if:
a. it is able to repurchase from the transferee the previously transferred Exposures in order to realise their benefits; or
b. it is obligated to retain the risk of the transferred Exposures.
2. In this regard, an Authorised Person acting as a Servicer in respect of the transferred Exposures will not necessarily constitute effective control of the Exposures.
3. In respect of Rule A4.10.1(j), the amount of consideration received in the form of a fixed amount of Securities in the SPE would generally be regarded as meeting this requirement if the transaction is conducted at arm's length and on market terms and conditions. Also, this requirement does not preclude excess cash from being channelled to the Authorised Person after all claims connected with the Securities issued by the SPE have been paid out.