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July 28, 2017

ECB issued public guidance on information on transactions that go beyond the contractual obligations of a sponsor institution or an originator institution under Article 248(1) of the Capital Requirements Regulation or CRR (Regulation (EU) No 575/2013). The guidance states that a notification should be made to ECB in writing, no later than 15 working days following the execution of the transaction. An informal supervisory dialog on the specific features of a transaction may take place between an originator or sponsor institution’s representatives and the relevant joint supervisory team, once a transaction has been notified to ECB.

A significant supervised entity that is required to notify a transaction to ECB is encouraged to notify each transaction separately to ECB, in accordance with the Annex to the public guidance. CRR (particularly Article 248 thereof) establishes a general notification requirement to the competent authority for a credit institution acting as a sponsor or as an originator which, in respect of a securitization, has made use of Article 245(1) and (2) of that Regulation in the calculation of risk-weighted exposure amounts or has sold instruments from its trading book to the effect that it is no longer required to hold own funds for the risks of those instruments. The scope of the notification requirement is further specified in EBA guidelines on implicit support for securitization transactions (EBA/GL/2016/08). ECB intends to comply with the EBA guidelines that detail the transactions that go beyond the contractual obligations of a sponsor institution or an originator institution and, therefore, are required to be notified to the competent authority.

 

Related Links

Public Guidance (PDF)

CRR (PDF)

EBA Guideline: EBA/GL/2016/08 (PDF)

Keywords: Europe, Banking, CRR, Guidance, Securitization, EBA, ECB

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