The European Commission (EC) adopted an implementing regulation for the provision of information in accordance with the simple, transparent, and standardized (STS) notification requirements for on-balance-sheet synthetic securitizations. EC also published the text of two draft delegated regulations under the Capital Requirements Regulation or CRR.
The key highlights of the aforementioned updates follow:
- The Implementing Regulation 2022/1929 amends the implementing technical standards laid down in Regulation (EU) 2020/1227 with regard to the templates for the provision of information in accordance with the STS notification requirements for on-balance-sheet synthetic securitizations. This regulation amends Annexes I to III to the Implementing Regulation 2020/1227, which specify the information that is to be reported to the European Securities and Markets Authority (ESMA) for securitizations meeting the STS requirements set out in Articles 19 to 22 and Articles 23 to 26 of Regulation 2017/2402. The regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union—that is, November 02, 2022.
- One of the draft Delegated Regulations amends Delegated Regulation 241/2014 and lays down regulatory technical standards with regard to the prior permission to reduce own funds and the requirements related to eligible liabilities instruments. Regulation 2019/876 (CRR 2) amended the terminology used in a number of Articles of the Capital Requirements Regulation (CRR or Regulation 575/2013). Those amendments should be reflected in the Commission Delegated Regulation 241/2014, which sets out regulatory technical standards for own funds requirements for institutions. EC shall decide within three months of receipt of the draft standards whether to endorse the drafts submitted. EC may also endorse the draft standards in part only, or with amendments, where the Union's interests so require.
- The other draft Delegated Regulation supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to regulatory technical standards that specify the types of factors to be considered for the assessment of the appropriateness of risk-weights for exposures secured by immovable property and the conditions to be taken into account for the assessment of the appropriateness of minimum loss given default values for exposures secured by immovable property. The European Banking Authority (EBA) is mandated to develop, in close cooperation with the European Systemic Risk Board (ESRB), these draft regulatory technical standards under Articles 124 (4) and 164 (8) of CRR (cover changes introduced in CRR 2 also). For institutions applying the standardized approach, the draft regulatory standards delineate the types of factors to be taken into account in the determination of the loss expectation. For institutions applying the internal ratings-based (IRB) approach to retail exposures secured by residential or commercial immovable property, these draft regulatory standards emphasize the systemic risk approach of such an appropriateness assessment. EC shall decide within three months of receipt of the draft standards whether to endorse the drafts submitted. EC may also endorse the draft standards in part only, or with amendments, where the Union's interests so require.
- Regulation on On-Balance-Sheet Synthetic Securitizations
- Regulatory Text for Own Funds and Eligible Liabilities Instruments
- Regulatory Text for Exposures Secured by Immovable Property
Keywords: Europe, EU, Banking, CRR, Basel, Regulatory Technical Standards, Reporting, STS Securitization, Synthetic Securitization, Regulatory Capital, Credit Risk, EBA, EC
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