Norway's securitisations to join the EU
It is not a widely known fact that some European Union laws can be adopted by the other three countries of the European Economic Area - namely Norway, Iceland and Lichtenstein - in such a way that, once adopted those countries are considered to be fully part of the EU for the purposes of the subject matter of those laws. Even less known, we suspect, is that the EU Securitisation Regulation is such a law. This week, five years after coming into force in the EU, the Securitisation Regulation (and its later 2021 amendment) was formally adopted by the EEA. […]
June 2024 Newsletter
Anna Woźniakowska joins PCS
PCS is proud and delighted to announce that Anna Woźniakowska-Dębiec is the newest member of the PCS team. Trained as a lawyer, Anna has a range of experience within both the private sector and the Polish Financial Supervision Authority. She was both a member of the EBA Subgroup on Securitisation and Covered Bonds and ESMA Securitisation Task Force. Anna joined the PCS Outreach Team. Beyond her professional engagements, she actively contributes to various women’s initiatives, including serving as a board member for the Polish Ladies Golf Association.
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 […]
PRA and FCA publish the new UK securitisation rules
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 […]
And the support kept rolling in from everywhere...again
Following a plethora of voices supporting the revival of European securitisation, last week saw another addition to the chorus. It came in the form of the publication of the report by a committee set up by the French Treasury and headed by Christian Noyer. The report entitled "Developing European Capital Markets to Finance the Future" (which can also be read in the original French) makes for interesting reading indeed, especially in its opening analysis of the reasons why many European policy makers are deeply concerned about the consequences of an underpowered European capital market. To its credit, the report also […]
UK Treasury publishes draft securitisation statutory instrument 
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 […]
And the support kept rolling in from everywhere...
In the past few months, the revival of a safe and strong securitisation market as a key priority for Europe's future has received high level support from numerous directions, including the ECB's president, its Governing Council, the Eurogroup and the finance ministers of France and Germany. This week, more support came from Enrico Letta in his report on the European Single Market. The report was commissioned by EU leaders last year. It was designed and is likely to influence the European Council’s strategic agenda for the next five years following the elections in June of a new Parliament and the […]
Eurogroup adds its support for the revitalisation of European securitisation
The only thing arriving seemingly in greater numbers than new public securitisation transactions this March are expressions of support for the market from European policy makers. The same day as the supportive Governing Council of the ECB's statement but maybe less noticed, we saw the publication of the "Statement of the Eurogroup in inclusive format on the future of the Capital Markets Union". The Eurogroup is an informal body created in 1997 in which the ministers from the euro area member states discuss matters relating to their countries' common responsibilities related to the euro. This statement was the result of a […]
PCS files its response to ESMA's consultation on disclosure
PCS has filed its response to ESMA's consultation on disclosure requirements. Our views are that the current disclosure templates are overly prescriptive, contain many unnecessary requirements and have become a deterrent to potential originators. This constricts a European securitisation market that is ever more necessary to the future of the continent. Even if one does not want to wade through the more than twenty pages of our response, containing a number of fairly technical points, we would invite stakeholders to peruse our general considerations on the subject set out in the first few pages.
More support for securitisation reform from the ECB
Following the speech by Christine Lagarde last November calling for the revitalisation of the European securitisation market as a key priority for the European Union, the European Central Bank has now issued a statement by its Governing Council on advancing the Capital Markets' Union. As in the speech by Ms Lagarde, the statement places the growth of a securitisation market at the center of its recommendations. Together with consolidated European supervision, the harmonisation of insolvency, accounting and securities laws, the improvement of post-trading regimes and the amelioration of the fiscal disadvantage faced by equity investments, securitisation is one of the […]
Securitisation, Europe's categorical imperative
It is rare for Immanuel Kant's name to be associated with the technical subject of securitisation. Yet this is what happened when Christine Lagarde asked for a "Kantian shift" in respect of the CMU. Taking our cue from such eminent personage, PCS also called on the memory of the great Enlightenment philosopher in an article published in Eurofi's Regulatory Update magazine and entitled, "Securitisation, Europe's categorical imperative".In the article, we set out the reasons securitisation's benefits go well beyond assisting European banks with episodic capital tight spots. Securitisation, by helping at one and the same time both the banking channel […]
PCS response to the PRA consultation on the output floor
Today, PCS submitted its response to the PRA on its consultation on how best to handle the introduction of the output floor pursuant to Basel 3.1 as it relates to securitisation. Although welcoming the PRA’s suggestions, PCS felt bound to point out that all the obvious difficulties that flow from a rigid application of the proposed Basel rules to securitisations – and especially SRT securitisations – flow from the original miscalibration of the capital requirements.  More specifically, they flow from an incorrectly calibrated non-neutrality factor. This is then made worse by structural flaws in the current CRR architecture that results […]
ESMA's Christmas Present: a Consultation on the Disclosure Templates
With the markets pretty much gone for the festive break, ESMA gave the markets an unexpected Christmas gift: it published today the much-awaited public consultation on the overhaul of Securitisation Regulation's disclosure templates. To be commended, ESMA's consultation showed no lack of ambition, in that it opens potentially wide vistas of change rather than limiting itself to tweaks. ESMA seeks feedback on four possible ways forward, ranked from minimal to most extensive: The deadline for response is the 15 March 2024.
2023 - The STS Year in Review
Lagarde calls for a strong securitisation market as an essential component of a historically necessary change to Europe's finance architecture
It is not everyday that a public official calls upon the legacy of the great philosopher Immanuel Kant, but Christine Lagarde did just that today in a short but impactful speech on the historical necessity of the creation of a strong European capital market's union. A more than notable passage in the speech reads: "A genuine CMU would mean building a sufficiently large securitisation market, allowing banks to transfer some risk to investors, release capital and unlock additional lending." Not only is this very high profile support for a strong securitisation market positive, but it should be noted that it […]
UK PRA publishes a paper on future capital calibrations
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 […]
October 2023 Newsletter
New PCS Member
It is a great pleasure to announce that Piraeus Bank, a leading systemic Greek Bank, has become the newest member of the PCS Association. We welcome them to the PCS family and look forward to their participation and input.
PCS files its response to the Financial Stability Board's request for feedback
PCS filed its response to the FSB's request for feedback on the success or otherwise of the G20 reforms of the rules surrounding securitisation. Although the FSB is a body with a global remit, in line with our social purpose and our area of expertise, PCS' response deals with the impact of securitisation regulations in Europe, including both the European Union and the United Kingdom. In view of the very short time provided by the FSB for comments - a mere three weeks - our piece is short and provides a high-level view of the impact of the current regulations […]
An invitation for feedback from the FSB (, not that one)
Europe’s Financial Stability Board published, on August 30th, an invitation for feedback on the effects of G20 financial regulatory reforms on securitisation .  This is a precursor to a report the FSB intends to write on the topic by mid-2024 and on the draft of which they have committed to consult. With a tight deadline for submission of 22nd September, it is not clear what European securitisation stakeholders will be able to provide.  The three week deadline leaves no time for the gathering of meaningful data beyond what is already on stakeholders’ shelves or the articulation of complex argumentation additional […]
UK FCA issues a consultation on proposed new rules for securitisation
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 […]
New PCS Member
It is both a pleasure and an honour for us to announce that Attica Bank has become a member of the PCS Association.  Headquartered in Athens, Attica Bank shares PCS' commitment to the growth of the securitisation market both in Greece and throughout Europe.
New PCS Members
PCS is honoured to receive three new members to the PCS Association. These are Alpha Bank, Eurobank and Waselius & Wist. Alpha Bank and Eurobank are two leading banks in Greece, both active in the securitisation market on the synthetic side. Waselius & Wist is a prominent Finnish law firm based in Helsinki and also active in securitisation having represented the biggest players in the market. We welcome them to the growing PCS family and look forward to their contributions to PCS’ continued mission of assisting European securitisation grow as an essential tool for the funding of the economy.
ESMA publishes an updated securitisation Q&A
It would appear policy makers and regulators are clearing their decks before departing for their summer holidays and the welcoming beach. After the publication on Monday of the retention RTS by the Commission and the publication of the near final draft of the UK securitisation statutory instrument by HMT on Wednesday, it is now the turn of ESMA. The European securities regulator has just published an updated set of securitisation Q&As. Unsurprisingly, in view of their remit, these deal primarily with disclosure and templates. Helpfully, ESMA has highlighted additions and amendments. Market participants can now add this to their beach […]
UK Treasury publishes near-final draft of the rules replacing the EU Securitisation Regulation
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 […]
PCS responds to the EBA consultation on STS synthetic guidelines and the Commission issues final RTS on retention
Two for one on news today. First, PCS filed its response to the EBA's consultation on the draft guidelines for synthetic/on-balance-sheet STS securitisations. As we approach the final implementation of the Basel III rules, the issue of capital management has loomed ever larger for many European banks. The increase in synthetic/on-balance-sheet securitisations reflects this trend. Going forward, the creation of a large and successful STS synthetic securitisation segment is likely to be a key element of the future development of the European banking system. This is why this seemingly exceedingly technical and dry consultation is, in reality, of great importance. […]
June 2023 Newsletter
Joint-Committee publishes final draft of sustainability disclosure templates for STS
Yesterday, the Joint-Committee of the ESA's published the final draft of the RTS on sustainability disclosure templates for STS. To remind everyone, the original STS rules passed in 2017 required mortgage and auto transactions to disclose sustainability information for the underlying assets but only to the extent it was available to the originator. In the 2021 amendment, an additional but entirely optional measure provided that originators of mortgage or auto STS could, should they wish, disclose slightly different information on the "principal adverse impact of the assets financed by underlying exposures on sustainability factors". The legislators then mandated the ESAs […]
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