ESAs Issue Q&A and Opinion on Provisions of Securitization Regulation
ESAs jointly published a set of questions and answers (Q&A) on cross-sectoral aspects of the Securitization Regulation. The Q&A clarify the content and format of the information of a securitization transaction that should be disclosed by the originator, sponsor, and special purpose entity issuer. The Q&A also clarify the transaction documentation of a Simple, Transparent, and Standardized (STS) securitization that should be made publicly available to facilitate investor compliance with its due diligence requirements as well as the type of STS certification services that can be provided by Third Party Verifiers to the securitization parties. Another joint publication from ESAs sets out an opinion on the jurisdictional scope of the obligations of the non-EU parties (or third-country parties) to securitizations under the Securitization Regulation.
The joint opinion on jurisdictional scope is intended to facilitate the understanding of certain provisions of the Securitization Regulation in cases where third-country entities become parties to a securitization and is intended to help improve the functioning of securitization markets in EU. The opinion clarifies the potential obligations of such third-country parties as well as related compliance aspects of a transaction under the Securitization Regulation. In this opinion, ESAs set out their common view on the practical difficulties faced by market participants in connection with the jurisdictional scope of application of various provisions in the Securitization Regulation in the following scenarios:
- Securitizations where some, but not all, of their sell-side parties—including originator, original lender, sponsor, and special purpose entity issuer—are located in a third country
- Securitizations where all sell-side parties are located in a third-country and EU investors invest in them
- Investments in securitizations by subsidiaries of EU regulated groups, where those subsidiaries are located in a third country
- Securitizations where one of the parties is a third-country investment fund manager
The joint opinion recommends that these difficulties should be addressed, where possible, through interpretative guidance from EC. ESAs also invite EC to undertake a comprehensive review of the jurisdictional scope framework of the Securitization Regulation as part of the upcoming overall reform of this Regulation, as a means of thoroughly addressing market participants’ concerns regarding proper market functioning.
Related Links
Keywords: Europe, EU, Banking, Insurance, Q&A, Securitization Regulation, STS Securitization, Jurisdictional Scope, Third-Country Parties, Opinion, EC, ESAs
Related Articles
BoE Seeks Information Before Migrating Statistical Reporting to BEEDS
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
CFRF Publishes Guides to Manage Financial Risks from Climate Change
The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
ESAs Report on Supervisory Independence of Competent Authorities
The European Supervisory Authorities (ESAs) published individual reports on the supervisory independence of competent authorities in their respective sectors.
FED Updates FR Y-9C Form and Instructions, Proposes to Extend FR 2510
The Board of Governors of the Federal Reserve System (FED) updated reporting form and instructions, along with the associated supplemental instructions, for the information collection on consolidated financial statements for holding companies (FR Y-9C).
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
