EBA Proposes Guidelines for Interpreting STS Securitization Criteria

By Regulatory News

April 20, 2018

EBA launched a public consultation on the draft guidelines that will provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS). The EBA guidelines will play a crucial role in the new EU securitization framework, by providing a point of consistent interpretation of the STS criteria to originators, sponsors, investors, and competent authorities throughout EU. The consultation runs until July 20, 2018.

The guidelines, developed for both non asset-backed commercial paper (ABCP) and ABCP securitization, clarify and ensure common understanding of all the STS criteria, including those related to the expertise of the originator and servicer, the underwriting of standards, exposures in default and credit impaired debtors, and predominant reliance on the sale of assets. The guidelines will be applied on a cross-sectoral basis throughout the EU. The guidelines have been developed according to Articles 19(2) and 23(3) of the Securitization Regulation, which mandates EBA, in close cooperation with ESMA and EIOPA, to adopt guidelines and recommendations on the harmonized interpretation and application of the criteria related to simplicity, transparency and standardization for the non-ABCP securitizations, and transaction-level and program-level criteria for the ABCP securitizations.

Related Links

Comment Due Date: July 20, 2018

Keywords: Europe, EU, Banking, Securitization, STS Securitization, ABCP Securitization, EBA

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