News - PCS

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27/10/2021

October 2021 Newsletter

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27/10/2021

Commission's Call for Evidence on Securitisation - progress...but ever so slow

In the securitisation consultation which closed last month, the Commission wrote that it would issue a call for evidence to the Joint Committee of the ESAs on the key unfinished parts of the STS reform - namely capital calibrations and LCR treatment. True to its word, the Commission has now issued this call for evidence (found here). The good news is that it seems to cover all the items needing to be covered including the capital calibrations for both bank and insurance investors and the treatment of securitisations for the liquidity coverage ratio. It also name checks the excellent report […]

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25/07/2021

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.

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04/07/2021

Hellenic Financial Stability Fund joins the PCS Initiative

It is with great pleasure that PCS announces that the Hellenic Financial Stability Fund (HFSF) has become a Permanent Observer of PCS. Founded in 2010 with the objective of contributing to the stability of the Greek banking system for the public interest, the HFSF has during that time contributed to the rescue and restructuring of the Greek systemic banks and acted as a catalyst for stability and transformation in the Greek banking system. We encourage you to find out more about the HFSF on their website: https://hfsf.gr/en/ PCS very much looks forward to the HFSF’s contribution to our work in […]

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27/06/2021

Final pieces of the puzzle fall into place - Data Repositories

On Friday 25th, the final pieces of the STS regulatory puzzle fell into place when ESMA registered two securitisation repositories. The registrations of both the European Datawarehouse GmbH, based in Frankfurt, and Secrep B.V. , based in Rotterdam, were announced on the same day. Both firms have long experience in the field, Secrep B.V. having been set up by the founders of Euro-ABS. Both will be able to operate throughout the EU. Following this registration, originators of European Union securitisations will - as of 30th June 2021 - mandatorily have to report their data through one of these repositories. This […]

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08/06/2021

June 2021 Newsletter

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18/05/2021

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

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 […]

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06/04/2021

News Flash: securitisation rules to come into force on Friday

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.

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26/03/2021

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 […]

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18/02/2021

February 2021 Newsletter

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10/01/2021

Harry Noutsos joins PCS

PCS is very proud to announce that Harry Noutsos has joined us. Well known to a great many in the market, Harry has twenty years of experience is securitisation having worked at Credit Suisse, Santander and then ING where he was responsible for all the bank’s securitisation positions as well as assisting it in securitising its own assets. With his extensive background in both the buy side and the sell side, Harry is now part of PCS’ Outreach team where we look forward to his enthusiasm in deepening our relationships with all our stakeholders.

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04/01/2021

FCA STS list up and running

First, PCS wishes for all a new year more serene than the one just ended and hopes that the holiday season proved to be a source of joy and rest notwithstanding the various restrictions imposed by the pandemic. As they had promised, the UK FCA set up their website list for UK transactions wishing to be treated as STS in the hands of UK investors. As our attentive readers will recall, this was a necessary step for the STS regime to come into force in the United Kingdom on January 1st. It has been done. To save you from having […]

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10/12/2020

2020 - The STS Year in Review

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07/12/2020

A new ESAs statement and Brexit - Chronicles of a Death Foretold

The Joint Committee of the European Supervisory Authorities (ESAs) has issued a statement clarifying the impact of Brexit on STS. It just confirms what we knew: existing STS transactions with a UK originator or sponsor or special purpose vehicle will cease to be STS in the hands of European Union investors. The only small additional point is timing. The rules grant CRR and LCR benefits to STS transactions. An STS transaction is a transaction that meets the requirements and appears on the ESMA list. Therefore, there was the possibility of a short grace period between 1st January 2021 and the […]

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23/11/2020

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

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 […]

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28/10/2020

Chances of new synthetic STS and NPL rules applying to the United Kingdom recede

Yesterday, the ECON committee of the European Parliament pushed back to November 9th a key meeting to agree their version of the proposed amendments to the STS Regulation. This delay further reduces the already slim chances of the proposed changes beating the Brexit deadline for incorporation into the UK’s securitisation regime. For those who are not experts in the intricacies of placing European laws on the statute books, the key is to remember that under the UK Withdrawal Act, only European laws that are “in force” at 11.00pm London time on the 31st December 2020 will be UK laws going […]

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09/10/2020

October 2020 Newsletter

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09/09/2020

United Kingdom FCA publishes a consultation on the end of the Brexit transition period

Last Friday the UK Financial Conduct Authority published a consultation on some of the changes that may be made to their Handbook. Most important for stakeholders are the proposals for what happens at 11.00 pm London time on 31st December as the Brexit transition period comes to an end. This consultation, which may be found here, covers a number of Brexit topics in paragraph 4. These include (from paragraph 4.17 onwards) securitisation issues, namely data templates, data repositories, STS notifications, counterparty risks and risk retention. The consultation period ends on October 5th. With so many tricky issues of detail plaguing […]

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26/07/2020

First legislative steps taken to complete the STS reforms

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 […]

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13/07/2020

July 2020 Newsletter

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11/06/2020

New report published - changes may be on the way

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 […]

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06/05/2020

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 […]

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27/04/2020

Europe to complete the unfinished STS reforms if securitisation is to fulfil its potential

PCS was invited by EUROFI to contribute a substantial article for their regulatory update paper. EUROFI, a platform for exchanges between the financial services industry and the public authorities, has long provided a forum in which the future of European securitisation has been debated and this paper was written to accompany the EUROFI web event that replaces the traditional EUROFI conference that was to be held in Zagreb this April. In the article, which may be found here PCS examines why the STS reforms, for all their achievements, have not sparked a renewal of the European securitisation market, why such […]

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17/03/2020

COVID 19 Communication from PCS

This communication sets out the measures that PCS has taken in the face of the current emergency. We are mindful of our duty to our staff, to protect them and their loved ones, and to the communities in which we live, to slow the progression of COVID 19. We are also dedicated, for all our stakeholders, to providing continued uninterrupted support to the European securitisation market . Accordingly, PCS has taken a number of steps. First, we have set up systems that will allow us to continue uninterrupted the provision of all our services to our clients. All our staff […]

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18/02/2020

PCS UK has moved!

As we have grown substantially with our new role as a regulated third party STS verification agent, our old offices had become a little cramped. So we have moved to new premises. PCS UK is now at 61 Queen Street, still in the City of London and a few steps away from Cannon Street Station. Our full new address is: PCS UK 61 Queen Street London EC4R 1EB We also have a new main office number: +44 (0) 20 3866 5000 London staff also have new numbers. For more details visit: Contact us The contact details of our EU operation, […]

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27/11/2019

PCS’ response to the EBA consultation on synthetic securitisation: not just for securitisation nerds

PCS was glad to respond to the EBA’s consultation on the possibility of introducing an STS regime for synthetic securitisations. It may be found here. Notwithstanding that this topic may seem highly technical and of interest only for the hard-core enthusiast, we believe that it is – in fact – possibly one of the most important financial files in front of policy makers today. Even if you have little interest in the detailed responses to the specific proposals, we would invite everyone to read our general comments at the start of our response. (They are only three pages long). Broadly, […]

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30/10/2019

PCS improves the functionality of its verification reports

Having reached out to the investor community and asked what PCS could do to improve the quality of their STS due diligence, we were told that what was really missing from our STS Verification reports was the capacity to focus immediately on those issues individual investors felt were the most challenging on any given deal. Attentive to our mission to assist all stakeholders in the market, we have now introduced our new STS Verification report format with new functionality. With the new format, investors (and any other interested party) can consult the index of contents and click on those specific […]

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19/10/2019

Erratum

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.

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18/10/2019

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

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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25/09/2019

Securitisation regulation, the next chapter: EBA launches consultation on synthetic securitisation

Today, the EBA released a consultation on synthetic securitisation and STS. This two months consultation is designed to inform the EBA in the preparation of a report that it has been instructed to prepare by the European Commission on how an STS standard may be crafted for synthetic/risk transfer securitisations. This report, in turn, was requested of the Commission by the European Parliament. The European Parliament was looking into the possibilities of introducing a similar scheme to that of the current STS regime which is today only available for “true sale” securitisations. Although this may seem, at first glance, a […]

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