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We are concerned by the new definition of the type of obligor, in particular about the impact of the new “Large Corporates” definition. The proposed separation would result in the exclusion of an important part of our portfolios from future securitisations. This may occur because many companies, despite being SMEs, would fall within the new definition of “Large Corporates”.
In addition, if it is also required to adjust existing deals, this will force us to buy back credits already transferred to the SPV. These repurchases would be added to those that occur during the life of the transaction and may compromise the performance of the securitisation deal.
Corporate debtors (SMEs and others) provide different documents compared to private customers, which is why rating techniques are designed differently (e.g. separate procedures for private/corporate customers). The rating usually have in common that a PD or scoring is determined as part of a credit underwriting process. The idea of establishing a turnover based distinction category for "Large Corporates" based on the CRR III turnover definition does not seem to be expedient with the procedures of originators and credit risk characteristics of corporate debtor portfolios, especially for originators that are non-banks.
In practice, rating models and procedures are defined and calibrated differently from originator to originator and are not based on the CRR's turnover/size definitions. In addition, there is no consistent distinction based on turnover numbers in the market. In order to carry out an adjustment of the homogeneity criteria, an artificial size distinction of a corporate debtor should be avoided. Currently, there is no evidence that based on turnover size, corporate debtors portfolios and credit risk characteristics behave differently or in a way that such pools are not homogeneous and require other credit risk assessment techniques from an investor perspective.

In our opinion, the proposal to differentiate between Corporate and “Large Corporates” as defined in the CRR III as well as the requirement for “Same Approaches” is not appropriate for classifying a pool as homogenous.
Finally, regarding the "Active" portfolio selection, this may create a new risk for investors and market stability and in our opinion it will be disadvantageous. This can lead to the discrimination of market participants (e.g. for those which do not have a sufficiently large asset portfolios or belong to one turnover class or another) and creates incentives for cherry picking. We therefore propose to delete the turnover size limit for corporate obligors.