PCS Presents: Basel 3.1 in partnership with KPMG

In a new venture for PCS, we present our first YouTube interview with experts and market participants. Designed to delve deeper into a specific subject, this first interview is with Alec Innes, partner at KPMG who addresses the final implementation of the Basel framework. Alec delves into the multifaceted realm of Basel 3.1 capital requirements and its profound implications for banks. He dissects the operational changes that Basel 3.1 will drive and the financial resource challenges that accompany them. He examines the dichotomy of Basel 3.1 as both a regulatory aid but also a potential hindrance, navigating the fine line […]

Following the publication by the UK Treasury of the draft statutory instrument, the FCA and PRA have today published policy statements on the new securitisation rules. These policy statements, each containing the full new proposed rules, can be found here and here. (Note that the proposed PRA rules are to be found hidden in the appendices - scroll down the left hand column). These rules, together with the statutory instrument will come into force on November 1st. This is all to the good since the market will take some time to digest these documents with the FCA rules alone running […]

Earlier this week, the UK Treasury published a draft statutory instrument on securitisation. For our readers less well versed in the British constitutional arrangements, a statutory instrument is a secondary piece of legislation passed by the government pursuant to an Act of Parliament (pace my British legal friend, I know but we are summarising here…). In Brussels it would be known as Level 2 and in many European jurisdictions as a “decree”. This draft is designed to fill in gaps left by the post-Brexit repeal of EU legislation, including the Securitisation Regulation. As assidous followers of PCS’ news items know, the […]

Following publication of HM Treasury’s near final statutory instrument and consultations by the PRA and FCA, all aiming to adapt the inherited EU Securitisation Regulation for a post-Brexit UK, the PRA has now issued a Discussion Paper on the Capital Requirements for Securitisation. The paper focuses on the consequences for the capital requirements of securitisations of the Basel 3 output floor, the hierarchy of methods for determining these capital requirements and a possible STS for on-balance-sheet (synthetic) securitisations. The initial suggestions of the PRA in all 3 areas deviate from the current trends in EU regulation and are not altogether […]

As a consequence of the UK leaving the European Union, the shaping of the regulatory landscape for finance, including securitisation, became the responsibility of the British government and British regulatory institutions. Following the publication of HM Treasury's near final statutory instrument modifying the European Securitisation Regulation and the UK PRA's consultation on its proposed changes, it is now the turn of the UK FCA to issue its own consultation on changes it would like to see to the existing rules inherited from the EU. A quick glance at the just issued document appears to show at attempt at fixing some […]

UK PRA launches public consultation on proposed reforms

UK PRA launches public consultation on proposed reforms The UK Prudential Regulatory Authority (UK PRA) has taken a significant step forward by launching a public consultation on proposed changes to the retained EU Securitisation Regulation and the accompanying technical standards on risk retention and disclosure. The deadline for submissions is Monday 30 October 2023. Rather than undertaking a complete overhaul, the UK PRA aims to introduce targeted adjustments to the existing EU securitisation framework with a target to implement the proposed changes by Q2'24. At headline level, key changes include: While adhering closely to the current technical standards, the UK […]

The UK Treasury has published a near final draft of the statutory instrument that will, in due course, fully replace the European Union Securitisation Regulation for the UK market. This draft updates the December 2022 draft on which we commented back then. It comes with a handy and helpful policy note. This new draft does not substantially alter the December version. To summarise the key points: The approach, in line with other changes to the legal and regulatory landscape of UK finance, is to remove large parts of the rules from primary law making and the UK Parliament to vest […]

UK publishes proposed amendments to the Securitisation Regulation

At the end of last week, the Chancellor of the Exchequer unveiled the government’s roadmap to a new regulatory framework for British finance. Although overlooked by most commentators, the announcement contained detailed proposals to revise the Securitisation Regulation inherited from the EU. These proposals may be found in a draft statutory instrument. There are quite a few highly technical drafting changes the implications of which are still somewhat unclear. But here are the highlights. The definition of “securitisation” remains unchanged. The STS regime remains in place. However, the STS criteria have disappeared from the legislative text altogether and are now […]

The French AMF, in its capacity as national competent authority under the Securitisation Regulation, did a spot check of five unnamed financial institutions issuing STS securitisations. The regulator looked at the institutions’ procedures around the issuance of STS securitisations generally, then examined in detail a number of transactions. Their conclusions are now published in the form of a report (in English) It would be fair to say that the regulator was deeply unimpressed by what it found in a number of cases. They expressed the view that, for several institutions (unnamed to spare blushes), the processes around the due diligences […]

UK Treasury publishes report on the review of the securitisation regime

The UK Treasury just released its report on the review of the securitisation regime. The overall impression is that the UK government is broadly happy with the current regime and is certainly not evincing any wish to tear up the rule book or effect radical changes to the regime inherited from the EU Securitisation Regulation. This report is about tweaking not transforming. A number of technical issues are broached, some small – but not insignificant – changes are mooted but the report is light on concrete proposals or time frames. On many of the issues where the report does suggest […]

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PCS Presents: Basel 3.1 in partnership with KPMG

PRA and FCA publish the new UK securitisation rules

UK Treasury publishes draft securitisation statutory instrument

UK PRA publishes a paper on future capital calibrations

UK FCA issues a consultation on proposed new rules for securitisation

UK PRA launches public consultation on proposed reforms

UK Treasury publishes near-final draft of the rules replacing the EU Securitisation Regulation

UK publishes proposed amendments to the Securitisation Regulation

The AMF publishes its investigation of STS practices by French banks – it was not impressed

UK Treasury publishes report on the review of the securitisation regime