ESMA Consults on Securitization Repository Data Consistency Thresholds
ESMA published a consultation paper on the guidelines on securitization repository data completeness and consistency thresholds. The proposed guidelines set out an initial calibration of thresholds to be applied by securitization repositories when verifying the completeness and consistency of disclosure templates submitted to them under the technical standards that were recently published by EC. These technical standards set out the key elements of the disclosure obligations for securitization transactions as well as the operational standards of securitization repositories. The consultation is open until March 16, 2020 and responses are being sought from securitization repositories, providers of securitization information to repositories, as well as trade associations, investors, and consumer groups.
The objective of the consultation is to help market participants and securitization repositories to understand ESMA’s expected maximum use of "No Data options" contained within a securitization data submission. The proposed guidelines in this consultation paper set out:
- The proposed calibrations for data completeness thresholds to be applied by securitization repositories
- Explanations on how and when ESMA intends to revise these thresholds
- An example of how the representativeness verification of these thresholds would be applied to a sample exposure report (Annex II)
The technical standards, recently published by EC, define the content and format of the information that an originator, sponsor, and securitization special purpose entity (SSPE) of a securitization must provide to competent authorities, investors, and potential investors in a securitization. They also set out the obligations of a securitization repository, through which this information must be made available. One of the obligations of a securitization repository is to verify that the data it receives from the originator, sponsor, and SSPE of a securitization is sufficiently representative of the underlying exposures in a securitization, which is understood as the permitted level of use of the "No Data options" in the disclosure templates by the securitization parties. ESMA aims to publish the final report on the guidelines as close as possible to the publication of the technical standards in the Official Journal of the European Union.
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Comment Due Date: March 16, 2020
Keywords: Europe, EU, Banking, Securities, Securitization, Securitization Regulation, Securitization Repositories, Data, Disclosure, No Data Options, ESMA
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