AMMC Supervision of FPCT Vehicles for Non-Performing Loans

Securitisation of non-performing loans in Morocco operates under a structured regulatory framework supervised by the Autorité Marocaine du Marché des Capitaux (AMMC). The Fonds de Placements Collectifs en Titrisation (FPCT) is the principal legal vehicle for these transactions. This note examines the regulatory architecture, eligibility conditions and practical implications for market participants.

Institutional architecture of Moroccan securitisation

The legal framework rests on Law 33-06 on securitisation of receivables, as amended, and its implementing texts. The AMMC sits at the centre as regulator and supervisor.

Role of the AMMC

The capital markets authority performs several functions in securitisation:

Authorisation of FPCTs. Every securitisation fund must obtain AMMC approval before launch. The filing typically includes the fund rules, the management regulations, the information memorandum and the contracts with service providers.

Visa of information memoranda. The AMMC stamps documents addressed to investors, checking completeness and consistency. It does not opine on the investment merits of the transaction.

Oversight of intermediaries. FPCT management companies, depositaries and statutory auditors fall under AMMC supervision.

Ongoing surveillance. The AMMC monitors authorised FPCTs and can intervene where regulatory obligations are breached.

Structure of an FPCT

An FPCT is a co-ownership without legal personality. Its main components are:

Units. Investors hold units representing their share of the fund's assets. Several unit classes can coexist, with differentiated risk/return profiles (senior, mezzanine, equity).

Securitised receivables. The fund's assets are the receivables acquired from one or more originators. For NPL transactions, those receivables are impaired under Bank Al-Maghrib classification rules.

Management company. An AMMC-authorised entity runs the administrative and operational management of the fund, including oversight of recovery.

Depositary. An authorised credit institution holds the fund's assets and checks the regularity of operations.

Eligibility of non-performing receivables

Not every claim can be securitised. The regulatory framework sets specific criteria.

General criteria

Assignability. The claim must be transferable — not subject to a legal or contractual prohibition on assignment.

Identification. Each claim must be individually identifiable (debtor, amount, schedule, security).

Documentation. Title documents and supporting evidence must be available and transferable to the FPCT.

Specificities of non-performing claims

NPL securitisation has additional characteristics:

Classification. Claims must meet Bank Al-Maghrib definitions of impaired receivables (overdue beyond 90 days; pré-douteuses, douteuses or compromises).

Provisioning history. The originator must disclose provisioning history so that net carrying value can be assessed.

Security. Collateral attached to the claims (mortgages, pledges, guarantees) transfers to the FPCT under the rules governing assignment of receivables.

Recovery. The management regulations must set out recovery arrangements, typically delegated to the originator (servicing) or to a specialised servicer.

Authorisation process for an NPL FPCT

Obtaining AMMC approval follows a structured process. Duration depends on complexity.

Filing contents

A typical filing includes:

Management regulations. The constitutive document defining purpose, duration, operating rules and unit-holder rights.

Information memorandum. Investor-facing disclosure of fund characteristics, risks, portfolio profile and cash-flow projections.

Contracts. Assignment deed, servicing agreement, depositary agreement and auditor engagement.

Business plan. Financial projections over the life of the fund, including recovery assumptions and stress scenarios.

AMMC review

The authority examines:

Completeness of required documents.

Compliance with statutory and regulatory requirements.

Economic coherence of the structure.

Investor protection — adequacy of disclosure and credit-enhancement mechanisms (overcollateralisation, tranching).

Timing and conditions

Review typically takes two to six months depending on complexity. The AMMC may raise observations and request additional information. Approval can be granted subject to specific conditions.

Structuring NPL FPCTs

NPL FPCT structures are designed around risk allocation and investor appetite.

Tranching and subordination

Multiple unit tranches redistribute risk:

Senior units. First claim on recovery cash flows; lower yield, moderate risk. Typical targets for insurers and pension funds.

Mezzanine units. Intermediate ranking; absorb losses after equity is exhausted.

Equity (junior) units. First-loss position; capture excess recoveries. Often retained by the originator or subscribed by specialised investors.

Credit enhancement

Techniques that support senior credit quality include:

Overcollateralisation — face value of securitised claims exceeds units issued.

Reserve fund — liquidity buffer against recovery volatility.

Stand-by credit line — committed advances for temporary cash-flow gaps.

External guarantee — third-party cover (insurer, bank) for part of losses.

Moroccan market context

Morocco's stock of non-performing loans provides a meaningful pool for securitisation. According to Bank Al-Maghrib (2025), total NPL stock stands at MAD 102.3 billion, with ratios of 8.3% for banks and 8.8% for finance companies. Provision coverage reaches 68%.

That backdrop supports:

• Originators with material impaired stocks to deconsolidate
• Provisioning levels that facilitate negotiated discounts
• Portfolio diversification that can mutualise recovery risk

Draft Law 02-26 on recovery of claims, currently under review and not promulgated, could, if enacted, affect servicing practices inside FPCTs. It is not the current legal basis for transfers.

Reporting and transparency

FPCTs are subject to strict disclosure duties.

Periodic reporting

Quarterly management report — portfolio evolution, collections, performance versus projections.

Annual financial statements — accounts certified by the statutory auditor.

Material events — immediate communication to the AMMC and unit-holders of events that may affect valuation or investor rights.

Unit-holder information

Unit-holders have access to management regulations and amendments, periodic reports, net asset value and general meeting notices.

Tax treatment of FPCTs

The FPCT tax regime is designed to support securitisation:

Tax neutrality. The FPCT itself is not subject to corporate income tax; taxation applies at unit-holder level.

Registration duties. Assignments of claims to an FPCT benefit from a favourable regime.

Withholding. Distributions to unit-holders are subject to withholding according to the holder's tax status.

Tax treatment depends on facts and applicable law; this note is not tax advice.

Advantages and limits of NPL securitisation

For the originator

• Deconsolidation of claims and release of regulatory capital
• Credit-risk transfer to investors
• Possible retention of debtor relationships through servicing
• Balance-sheet and prudential-ratio optimisation

For investors

• Access to an asset class less correlated with traditional markets
• Regulated transparency and AMMC supervision
• Choice of risk profile through tranching
• Potential secondary-market liquidity in units

Constraints

• Material structuring costs (legal, financial, audit)
• Authorisation timelines
• Operational complexity of ongoing management
• Minimum scale needed to amortise fixed costs

Conclusion

NPL FPCTs are a sophisticated instrument for channelling institutional capital into Morocco's distressed-credit market. The AMMC framework provides a supervised environment. Deepening that market depends on parties' ability to structure attractive transactions while controlling cost and timing.

For a comparison of investment formats, see securitisation versus direct sale of NPLs. The statutory vehicle itself is analysed in FPCT structures for Moroccan NPL transfers.

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Sources

• Law 33-06 on securitisation of receivables, as amended
• AMMC circulars relating to FPCTs
• Bank Al-Maghrib, Annual Report on Banking Supervision, 2025
• Draft Law 02-26 on recovery of claims (under review, not promulgated)
• AMMC regulatory documentation on securitisation