EBA publishes STS homogeneity and retention RTS’

The EBA has just published the draft STS homogeneity regulatory technical standard.  PCS has only had the chance to give this just published text a cursory look, but it would seem that the final document stays very close to the draft which had been the subject of the consultation.  With regard to the somewhat problematical fourth test relating to relevant risk factors though the EBA has introduced some welcome amendments.  Together with the STS homogeneity RTS, the EBA also published the regulatory technical standard on risk retention.

Strictly speaking, both these documents are drafts.  They are now in the hands of the European Commission.  The Commission must then decide if they are satisfied with these draft, at which point they will lay down the RTS for a 2 month review by the European Parliament and the European Council.  This review takes place only by way of a veto power.  In other words, neither the Parliament nor the Council may amend the text, but they do have the power to reject it.  However, the highly technical nature of these two draft RTS’ suggests that this is unlikely and therefore, we should anticipate these two RTS’ to become law sometime in the autumn.