Consultation on draft Technical Standards on securitisation retention rules

The European Banking Authority launches today a consultation paper on (i) draft Regulatory Technical Standards (RTS) to specify the securitisation retention rules and related requirements and (ii) draft Implementing Technical Standards (ITS) to clarify the measures to be taken in the case of non-compliance with such obligations. The consultation runs until 22 August 2013.

Both the RTS and the ITS ultimately aim at re-establishing securitisation on a sustainable basis  mainly by encouraging market participants to develop a more transparent and uniform securitisation market and by enabling more convergence of supervisory practices across Europe with regards to the securitisation retention rules and related requirements.

The key objectives of the draft RTS are i) an alignment of interest (risk) and information between securitisation sponsors, originators and original lenders and the investors buying securitisation transactions and ii) to facilitate the implementation of the 5% retention requirements and disclosure requirements of the sponsor, originator or original lender and the due diligence requirements of investors in securitisations.

The objective of the draft ITS is to specify the measures to be taken in the case of a material breach of the securitisation retention rules and related requirements. In particular, the ITS provide the assessment criteria for breaches of the Capital Requirements Regulation (CRR) and RTS requirements, as well as the implementation conditions and the calculation of additional risk weights to be applied by  competent authorities.

The EBA is requested to submit the draft RTS and ITS to the European Commission by 1 January 2014.

Background

The final compromise on the Capital Requirements Regulation and Capital Requirements Directive (CRR/CRD) provides a mandate for the EBA to further specify the securitisation retention rules and related requirements as well as the measures to be taken in the case of a breach of the obligations relating to the retention, due diligence and disclosure requirements.

The EBA has developed these draft RTS and ITS taking into account: i) the changes in the level 1 text of the CRR compared to the CRD II, ii) the current Guidelines on Article 122a and the associated Q&A published in September 2011,  and iii) relevant market developments 

Consultation process

Comments to this consultation paper can be sent to the EBA by e-mail to EBA-CP-2013-14@eba.europa.eu by 22 August 2013, indicating the reference EBA/CP/2013/14.

All contributions received will be published following the close of the consultation, unless requested otherwise.

A public hearing will take place at the EBA premises on 22 July 2013 from 09:30 to 12:00 UK time. To register for the public hearing, click here.