Featured Product

    ESAs RTS to Extend Treatment of Covered Bonds to STS Securitization

    December 18, 2018

    ESAs published two joint draft regulatory technical standards (RTS) to amend the RTS on the clearing obligation and risk mitigation techniques for non-cleared OTC derivatives. These standards provide a specific treatment for simple, transparent and standardized (STS) securitization to ensure a level playing field with covered bonds. They are required for the proper implementation of the European Market Infrastructure Regulation (EMIR) and will amend the current regulation on the clearing obligation and risk mitigation techniques on OTC derivatives not cleared by central counterparties (CCPs).

    Draft RTS on Risk Mitigation Techniques. ESAs are amending the Delegated Regulation (EU) 2016/2251 on risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty (CCP) under Article 11(15) of EMIR (Regulation No 648/2012) in the context of STS securitizations under the Securitization Regulation (Regulation No 2017/2402). The draft RTS amend the existing RTS by extending the special treatment currently associated with covered bonds to STS securitizations. The Securitization Regulation amends EMIR to ensure consistency of treatment between derivatives associated with covered bonds and derivatives associated with securitizations, with regard to the clearing obligation and the margin requirements on non-centrally cleared OTC derivatives. The treatment, which allows no exchange of initial margin and only collection of variation margin, is applicable only where a STS securitization structure meets a specific set of conditions equivalent to the ones required for covered bond issuers to be able to benefit from that same treatment. 

    Draft RTS on Clearing Obligation Under the Securitization Regulation. These RTS address amendments to the EMIR Clearing Obligation under the Securitization Regulation. EMIR, as amended by the Securitization Regulation, requires under Article 4(6) that the ESAs develop draft RTS specifying the criteria for establishing which arrangements under covered bonds or securitizations adequately mitigate counterparty risk with regard to the clearing obligation. The final report covers the draft RTS that specify the criteria for establishing which arrangements under covered bonds or securitizations adequately mitigate counterparty risk with regard to the clearing obligation and the that amend the three Commission Delegated Regulations on the clearing obligation with regard to the covered bond provisions. The final report is submitted to EC for endorsement of the draft RTS presented in Annex. From the date of submission, EC should take, within three months, the decision on whether to endorse the RTS.

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, Insurance, Securitization Regulation, STS Regulation, EMIR, OTC Derivatives, Clearing Obligation, Covered Bonds, Regulatory Technical Standards, ESAs

    Related Articles
    News

    EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR

    EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).

    July 01, 2020 WebPage Regulatory News
    News

    FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform

    FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS on Package for 2020 Data Collection on ICS and Aggregation Method

    IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.

    June 30, 2020 WebPage Regulatory News
    News

    BIS to Establish More Innovation Hubs in Europe and North America

    BIS announced that it will establish new Innovation Hub centers across Europe and in North America in cooperation with member central banks.

    June 30, 2020 WebPage Regulatory News
    News

    FED Updates Form FR 2052a for LCR Reporting by Banks

    FED updated the reporting form for FR 2052a, which is used to monitor the overall liquidity profile of certain supervised institutions.

    June 30, 2020 WebPage Regulatory News
    News

    PRA Statement on Changes to CRR in Response to COVID-19 Crisis

    PRA published a statement that sets out its views on certain amendments made to Capital Requirements Regulations (CRR and CRR2) via EU Regulation 2020/873 (CRR "Quick Fix"), including some guidance for firms.

    June 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Approach for Publishing Solvency II Technical Information

    PRA is proposing (CP5/20) an approach for publication of Solvency II technical information after the end of the transition period for Brexit.

    June 30, 2020 WebPage Regulatory News
    News

    FASB Announces Upgrade of SEC EDGAR System to Release 20.2

    FASB announced that SEC has upgraded the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system to Release 20.2.

    June 30, 2020 WebPage Regulatory News
    News

    CFRF Publishes Guide for Addressing Climate-Related Financial Risks

    The Climate Financial Risk Forum (CFRF), which is a joint climate risk forum of FCA and PRA, published a guide written by the industry for the industry to help firms approach and address climate-related financial risks.

    June 29, 2020 WebPage Regulatory News
    News

    IAIS Paper Provides Guidance on Liquidity Risk Management for Insurers

    IAIS published an application paper on liquidity risk management for insurers.

    June 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5414