Parties and controls
The question an institutional buyer asks about any structure is who can do what, and what stops them. This page answers it.
Who does what
| Role | Who performs it here | What they can do |
|---|---|---|
| Issuer | CARA7 platform | Holds the escrow, the cash reserve and the carry. Executes the priority of payments. Cannot be instructed to pay differently |
| Seller and originator | The originator | Sells the receivables at closing, funds the cash reserve through a subordinated loan, receives the residual |
| Servicer | The originator | Collects from customers, reports collections, initiates each payment date |
| Calculation agency | CARA7 platform | Computes every rank from the collections figure and the transaction's own state |
| Paying agency | CARA7 platform | Pays every holder of record. The payment cannot be redirected |
| Reference rate | CARA7 platform | Publishes the EURIBOR fixing, subject to a staleness limit |
| Independent verification | Agency layer, read-only | Recomputes, reconciles and publishes. Holds no signing rights |
What the servicer can and cannot do
The servicer holds the only privileged rights on the transaction. It can initiate a payment date, close the transaction once every class is subscribed, and declare enforcement.
It cannot change a coupon, reorder the priority of payments, pay one holder ahead of another, withhold a payment, move the cash reserve, or take money out of the transaction. These are not permissions it has been denied. The platform provides no such operation.
What the servicer does control is the collections figure it reports. That is the same exposure as in any securitization: the servicer knows what it collected and the other parties rely on its report, which is why transactions appoint auditors and back-up servicers. What differs here is that the figure is committed at the payment date and every consequence of it is derived and published automatically, so an incorrect figure surfaces at the next reconciliation rather than at the next audit.
What cannot happen
Three balance conditions are enforced at settlement. An operation that would break one does not settle, so the state cannot arise:
- the issuer's cash equals the cash reserve plus the rounding carry
- the paying agency's cash equals what it owes holders, plus amounts not yet collected, plus rounding residue
- across a payment date, no settlement asset is created and none disappears
Structural terms are enforced the same way rather than by undertaking. Principal is strictly sequential and Class A cannot be bypassed. Interest that cannot be paid is recorded as a shortfall rather than skipped. No rounding pays out more than the transaction holds. Closing is atomic: subscriptions and issuance either both settle or neither does.
Key management
Servicer rights are held by a single account on the current programme. A rated issue requires more: threshold or multi-signature control, a documented replacement procedure, a named back-up servicer, and an answer to who operates the register if the platform operator fails.
Those are the first questions a rating agency asks, and the market already has a template answer: KfW switched both its securities registrar and the underlying network mid-life on a live bond, as a deliberate resilience test. The programme is built to support the same.
Upgrades
The terms of a transaction are fixed at issuance and cannot be amended in place. A change of terms means a new series.
This is deliberate. Upgradeable implementations are convenient and are what most tokenised fund issuers use, but whoever controls the upgrade right controls the priority of payments, and an unconstrained upgrade right is treated by rating agencies as a cap on the rating. Where a future series requires amendability, it carries a timelock, signatories who are not a single party, and the express statement that the transaction documents prevail.
The independent check
Ten agents read the transaction and the portfolio and publish reports. They hold no signing rights.
The one that matters most to a buyer is the calculation agency: it takes the portfolio data and the fixing, recomputes the entire cascade for the period, and compares it line by line to what was paid. The most recent reconciliation on Series 1 concluded that every line reproduces exactly, to one ten-millionth of a euro.
That is a second opinion produced by something that did not perform the original calculation, available within minutes of the payment date rather than at the next reporting date. See the agency layer.