The last few months have seen numerous calls by eminent people to takes steps to reform the regulations governing securitisations and thus revitalise of the market on a sound basis. Today the European Commission, by publishing its consultation. formally started the process that, with a fair wind, could result in those hoped for reforms.
A (very) quick scan of the document reveals a number of things. First, it seems to be quite exhaustive, covering all the main topics identified as relevant. These include LCR eligibility, Solvency II and the possible addition of unfunded synthetics to the STS category, as well as those that were very much expected such as due diligence, disclosure and the now infamous p factor (ie CRR capital calibrations). In addition to being exhaustive it can also be said to be somewhat exhausting as there are a very many questions indeed. Although we have not counted, the Commission itself had indicated that there would be more than a hundred. A quick perusal confirms this. This makes the deadline of 4th December, or eight weeks, a tad challenging. Yet, the short period is also an indication of the seriousness of the Commission's intent to move very swiftly with this project. The Commission has publicly indicated that it very much hopes to have a legislative project to present to Parliament and Council by next summer.
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