The European Central Bank (ECB) published a non-binding guide, along with an associated template, to set out the notification practices that significant institutions acting as originators or sponsors of a securitization transaction are advised to follow.
ECB recommends that significant institutions follow this guide with respect to all securitization transactions originated after April 01, 2022, though ECB may request information, on a case-by-case basis, for securitization transactions that originated before this date. The guide specifies information that significant institutions are expected to submit to ECB, both at origination and during the life of securitization transactions, if a significant event (as defined in Article 7 (1) g) of the Securitization Regulation) occurs relating to the transactions, affecting compliance with Articles 6 to 8. ECB foresees a phase-in implementation until October 01, 2022 for the significant institutions unable to properly notify ECB from April 01, 2022. During the phase-in period, significant institutions are expected to finalize set-ups and systems to be able to submit notifications in line with the expectations of the guide. It is recommended that new transactions be notified to ECB no later than one month from the date of origination. ECB consulted on the draft guide on the notification of securitization transactions from November 2021 to January 2022. ECB also published the comments received on the draft guide.
The Securitization Regulation establishes a comprehensive legislative framework applicable to all securitizations, including requirements with regard to risk retention (Article 6), transparency (Article 7), and a ban on resecuritization (Article 8). The requirements of Articles 6 to 8 cover all securitizations within the scope of the Securitization Regulation, including public and private transactions; traditional, synthetic, and asset-backed commercial paper, or ABCP, transactions; and securitizations that are structured to achieve significant risk transfer and those that are not. The guide recommends that significant institutions acting as originators or sponsors for either private or public securitizations notify ECB of compliance of these transactions with Articles 6 to 8 of the Securitization Regulation. Notifications are expected to be submitted via a dedicated template, published alongside the guide. The guide will be updated from time to time to reflect developments in the regulation and supervision of securitizations.
Keywords: Europe, EU, Banking, Securitization Regulation, Securitization Framework, Securitization Transactions, Guidelines, ECB
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