European Parliament votes the new securitisation rules

Yesterday, in their plenary session, the European Parliament passed long anticipated amendments to the existing STS Regulation and concomitant changes to the Capital Requirement Regulation (CRR). This vote, which had been expected earlier in the year, looked like it had been derailed by a dispute over some of the tax focused provisions which would have potentially cut off access to the European market to Australian issuers. But, after some last minute negotiations between the Australians, the Parliament and Member States, an acceptable compromise was reached. To recap, the new securitisation rules contained in this legislative act allow certain synthetic on-balance […]

STS - the end of a long march, maybe the start of a new dawn

Today, in the European Parliament 457 votes were cast in favour of the STS Regulation (out of 617) and a further 458 votes for the CRR Regulation. Six years after the industry argued for a bifurcated regulatory scheme that treated high quality securitisation fairly and after many twists and turns, the new regime has finally seen the light of day. (As a technical matter, the law still requires the final signature of the Council, expected next week and publication in the Official Journal, expected within a couple of weeks.) Overall, we believe that - whilst no more perfect than any […]

European Parliament agrees the text on STS securitisation

This morning, the ECON Committee of the European Parliament voted on its compromise text for the draft STS securitisation legislation. This text is not the actual legislation but is an amended version of the original European Commission text. This amended text will now be brought together with the Council text agreed last December and the two will be subject to a reconciliation process involving the Commission, the Council and Parliament - the trilogue negotiation. The result of this negotiation will be the final text to be voted on and become the STS law. The trilogue will, in all likelihood, begin […]

Rapporteur report on STS securitisation is published

Today, Paul Tang, as Rapporteur, published his preliminary report on STS securitisation. This report will form the basis for the discussions that will now take place within the European Parliament, starting with the first exchange of views amongst ECON Committee members next Tuesday.

Rapporteurs and some shadow rapporteurs are appointed by the European Parliament

Today the S&D and the EPP groups have appointed the rapporteurs and shadow rapporteurs on the two key securitisation files to be dealt with in 2016. On the STS securitisation file, as expected, the rapporteurship went to the S&D group in the person of Paul Tang, the Dutch MEP. The EPP shadow rapporteur will be Mr Karas, from Austria. On the CRR file, dealing with changes to the capital requirements for banks investing in securitisations, the rapporteurship will be held by the EPP in the guise of Pablo Zalba Bidegain from Spain. The S&D shadow rapporteur on the CRR file […]

Delegated Acts for Solvency II adopted but the Parliament still has some questions

Upon the expiration of the deadline for objections on January 10th, the Solvency II delegated acts were adopted. These include, of course, the division of securitisations into two types and the calibrations that are now well known and still considered by many insurance companies as still too high. Of interest however is also the letter from the European Parliament to Commissioner Hill. In the letter, the Parliament asks for a speedy review of the calibrations for infrastructure investments. Although not immediately relevant to securitisation, this is a good sign nevertheless. With the EBA work being done on a definition of […]

European Parliament proposes positive amendments to the draft money market funds legislation

The complete set of amendments proposed by members of the European Parliament to the draft money market funds legislation has just been published. As readers will recall, the original draft was extremely restrictive as to the types of securitisations that could be purchased by MMFs - basically short dated corporate loans. A number of key MEPs have now tabled amendments. Particularly notable were the extension of the types of securitisations that MMFs could purchase proposed by Jean-Paul Gauzes, Wolf Klinz and Sharon Bowles. All three amendments request ESMA to define the types of securitisations that MMFs can invest in. Especially […]

In a draft report on long-term financing, the European Parliament recognises the importance of securitisation and calls for a definition of "high quality securitisation"

In its draft report on long-term financing of the European economy the European Parliament's Committee on Economic and Monetary Affairs has made key positive statements regarding securitisation and called for a definition of "high quality securitisation". In particular, the report stated: the Committee "believes that securitisation can play an important role in financial intermediation; encourages efforts to securitise high-quality assets while avoiding structures of high complexity; notes that there is scope for more standardisation and transparency; calls on the Commission to follow closely the activities of the International Organisation of Securities Commissions-Financial Stability Board working group on securitisation and to develop a […]