The issue of true sale is one of immense importance in the finance markets, where billions of pounds are invested based on a given treatment of a transaction. At the heart of many structured finance transactions is some form of transfer of assets - usually a sale.
Practitioners seek to ensure the robustness of this transfer because of concerns that courts might treat a transaction as a disguised loan or might unwind the transfer on the later insolvency of the transferor. Securitisation is the biggest market where this is a crucial issue, but other structured finance transactions where assets are transferred to a special purpose company or are to be off balance sheet also use true sales techniques, for example receivables purchase transactions.
The Law and Practice of True Sales raises issues of general law, applicable to many circumstances, as well as complex issues relating to insolvency and practical enforcement and issues arising in cross border transactions.
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