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Special-purpose entity

Special-purpose entity (special-purpose vehicle / SPV, or, in some cases in EU jurisdiction – FVC, financial vehicle corporation) is a “bankruptcy-remote entity”, a subsidiary, that is being used by a parent company to isolate or securitize assets as a means to reduce financial risks. Assets on a “bankruptcy-remote entity” remain secured even in case of a parent’s company bankruptcy. A special-purpose vehicle company has a liability structure and provides legal framework for swaps and other credit-sensitive financial operations.