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    FCA Updates Information on Implementation of Securitization Regulation

    October 29, 2020

    FCA updated information on the implementation of securitization regulation. The recent update relates to the notifications for the Simple, Transparent, and Standardized (STS) criteria on securitization. The onshored Securitization Regulation transfers the responsibility for maintaining a list of STS securitizations from ESMA to FCA. From the end of the transition period, FCA will maintain a list of securitizations duly notified to it as meeting the STS criteria of UK. FCA will soon open its portal wherein the notification templates can be accessed and the STS notification can be submitted before December 31, 2020, when the UK STS framework comes into effect. FCA will communicate with entities ahead of the portal opening.

    However, during the transition period, UK firms should continue to notify ESMA where a securitization meets the STS requirements. To qualify as UK STS, the originators and sponsor of a securitization must be established in the UK. FCA must be notified, using the onshore UK STS notification templates, for:

    • Securitizations that meet the UK STS criteria under the onshore regulation
    • UK securitizations previously notified to ESMA as EU STS and that meet the UK STS criteria

    Originators and sponsors should inform FCA under Article 27(4) of the Securitization Regulation when a securitization no longer meets the STS requirements. To maintain an accessible pool of STS products for UK institutional investors, EU securitizations notified to ESMA as meeting the EU STS criteria before and up to two years after the end of the transition period, and which remain on ESMA’s list, will also qualify as UK STS for the life of the transaction.

     

    Related Link: Update on STS Notifications

     

    Keywords: Europe, EU, UK, Banking, Securities, Securitization Solution, Brexit, STS Securitization, Brexit Transition, FCA

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