European Commission consults on securitisation

In line with the traditional review process, the European Commission has issued a consultation on the functioning of the EU’s securitisation framework. The deadline for the consultation is 17 September 2021. PCS will be responding, of course, and strongly encourages all market stakeholders to express their views. This is potentially an important milestone in completing the reforms started in 2019 but left unfinished. Repairing the issues that remained a problem would greatly help revitalising a key financing tool for the European economy.

Today, the Joint Committee of the European Supervisory Authorities (EBA, ESMA and EIOPA) issued their long-awaited report on the regulation of European securitisation. This report was mandated in the 2017 Securitisation Regulation and was supposed to provide a “tour d’horizon” of how the regulation was functioning and whether it was achieving its stated objective of reviving a safe and sound securitisation market. An initial review of the report would suggest that it appears to be a significant missed opportunity to address the shortcomings of the current regulatory framework and consequent failure to revive the market, and that it has not drawn the firm […]

Today the new securitisation rules were published in the Official Journal. With the shortened time for coming into force, on which we reported earlier, this means that synthetic STS and improved NPL securitisation rules will come into force this week, on Friday 9th April.

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 […]

Monday saw two important announcements from European regulators. First, the UK Financial Conduct Authority went live with its new STS notification platform. As of 11 pm on 31st December, UK securitisations will no longer be STS in the hands of UK investors unless they appear in a new publicly available list hosted by the FCA and replacing the ESMA list to which all securitisations were previously notified. To avoid a problematic interregnum between the time the new rules come into force at the end of the year and the time it takes for UK transactions previously notified to ESMA to […]

On Friday 24th July, the European Commission took the first legislative steps to complete the reform of securitisation rules begun with the passage of the STS Regulation in 2017. As has been commented on by a number of stakeholders from both the public and the private sector (including PCS whose commentary may be found here), the STS Regulation has been a technical success but a strategic disappointment as it has failed to raise the volume of securitisation issuance. This is widely attributed to the absence of a number of additional steps that would be required for the reform fully to […]

Yesterday the High Level Forum on the Capital Markets Union, a body set up by the European Commission and headed by Thomas Wieser, published its final report which may be found here The report is extensive and deals with a number of issues relating to the construction of deeper and broader capital markets in Europe. But, for our readers, the important bit starts on page 52. The Forum explicitly calls for growth in the European securitisation market and makes clear and specific recommendations as to practical steps which can be taken to achieve this laudable goal. These reflect suggestions and […]

EBA publishes its final paper on STS and synthetics

The EBA has published its final paper on whether and how the STS framework could be made to encompass synthetic securitisations. This paper drafted by the EBA at the request of the European Commission, is the technical advice provided to the latter to enable the Commission to write the report commissioned by the European Parliament on the topic. It follows on the discussion paper of September 2019 and shows the evolution of the EBA’s thinking. Although we have yet fully to digest this paper, a number of things stand out (beyond the very kind and positive name-check of PCS on […]

Following a request for a recount by perspicacious market participants, we confirm that the earliest date for the entry into force of the data RTS is early February and not, as erroneously communicated in Friday's post, late January.

Apologies for the slight delay in bringing out this news, but the PCS team has been most busy this week. On Wednesday though, the European Commission finally brought out the keenly awaited data RTS, including the many annexes. This sets out the data disclosure requirements that will apply to all European securitisations. (We should note here that the vexed issue of what qualifies as a "European securitisation" for these purposes remains unsettled - do the data requirements apply only to securitisations issued by European entities or do they apply to all securitisations sold in Europe, so snaring non-European issuers). This […]

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European Commission consults on securitisation

The Joint Committee of the ESAs’ report on securitisation is published

News Flash: securitisation rules to come into force on Friday

European Parliament votes the new securitisation rules

Monday sees important announcements from the EBA on SRT and the FCA on STS

First legislative steps taken to complete the STS reforms

New report published - changes may be on the way

EBA publishes its final paper on STS and synthetics

Erratum

The most anticipated release of the year is out, and it's not "The Joker"