Featured Product

    PRA Amends Policy on Significant Risk Transfer for Securitizations

    July 22, 2020

    PRA published the policy statement PS17/20, which updates the supervisory statement SS9/13 on the significant risk transfer for securitization transactions. PS17/20 will take effect on its publication. Chapter 8 of the occasional consultation paper CP3/20, which was published in March 2020, covered proposal for the update of SS9/13; the proposal in this chapter had set out to clarify that non-sequential amortization features constitute complex features in the significant risk transfer transactions. PRA received no responses to this chapter of CP3/20 and has, therefore, not amended the draft policy. PS17/20 is relevant to the Capital Requirements Regulation firms.

    SS9/13 supplements the rules in the Benchmarking of Internal Approaches and Credit Risk Part of the PRA Rulebook. According to the updated supervisory statement, PRA does not operate a pre-approval process for securitization transactions. Nevertheless, it expects a firm to discuss with its supervisor, at an early stage, the securitization transactions that are material or have complex features, including any non-sequential amortization. Where a firm claims a regulatory capital reduction from securitization transactions in its disclosures to the market, PRA expects such disclosures to include caveats making clear the risk of full or partial re-characterization where this risk is material in the light of the stated policy of PRA.

    PRA also announced that it will publish the feedback and the final policy for Chapters 2 to 7 of CP3/20 at a later date, as responses received to the consultation are still being considered. Furthermore, the policy set out in PS17/20 has been designed in the context of withdrawal of UK from EU and entry into the transition period, during which time UK remains subject to European law. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework at the end of the transition period, including those arising once any new arrangements with EU take effect. PRA has assessed that the policy would not need to be amended under the EU (Withdrawal) Act 2018.

     

    Related Links

    Effective Date: July 22, 2020

    Keywords: Europe, UK, Banking, CRR, Securitization, CP3/20, Significant Risk Transfer, PS17/20, SS9/13, Basel, PRA

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521