Final draft adopted by the EBA and submitted to the European Commission
The Implementing Technical Standards (ITS) on non-performing loans (NPL) transaction data templates specify the requirements for the information that sellers of NPLs shall provide to prospective buyers, and seek to improve the functioning of NPL secondary markets. The ITS aims at providing a common standard for the NPL transactions across the EU enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPL.
The European Banking Authority (EBA) launched today a public consultation on the draft Implementing Technical Standards (ITS) specifying the requirements for the information that sellers of non-performing loans (NPL) shall provide to prospective buyers, seeking to improve the functioning of NPL secondary markets. The objective of the draft ITS is to provide a common standard for the NPL transactions across the EU enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPL.
Common templates, including data fields with their definitions and characteristics set out in the draft ITS would facilitate the sales of NPL on secondary markets, increase efficiency of those markets and reduce entry barriers for small credit institutions and smaller investors wishing to conclude transactions.
The draft ITS are built around the templates to be used for the provision of loan-by-loan information regarding counterparties related to NPL, contractual characteristics of the loan itself, any collateral and guarantee provided with the associated enforcement procedures and the historical collection and repayment schedule of the loan. The NPL transaction templates are also complemented by a data glossary and the instructions for filling in the templates.
The draft ITS also take into account the proportionality principle by setting different information requirements depending on the size of NPL, specifying the mandatory and non-mandatory data fields, and considering a different scope of application of the data fields in relation to the nature of the borrower (private individual or corporate), and that of the loan (secured or not).
The EBA has developed the draft ITS leveraging on the experience gained with the voluntary use of the NPL data templates, which it had developed in 2017 and reflecting the industry feedback on the use of these templates and wider market practices. The EBA collected these experiences while developing the discussion paper that was published in May 2021.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 31 August 2022 extended to7 September 2022. All received contributions will be published at the end of the consultation, unless requested otherwise.
A public hearing on the draft ITS will take place via online meeting on Wednesday 15 June 2022 from 10:00 to 12:00 CET. Please register for the hearing here by 13 June 2022 16:00 CET.
Following the consultation period, the draft ITS will be finalised and submitted to the European Commission by the end of 2022.
Article 16(1) of the Directive on credit servicers and credit purchasers (Directive (EU) 2021/2167) mandates the EBA to develop draft ITS to specify the templates to be used by credit institutions for the provision of information to credit purchasers when selling or transferring non-performing loans (NPL) for the purposes of financial due diligence and valuation of NPLs.
The European Banking Authority (EBA) today published its final draft Implementing Technical Standards (ITS) specifying the requirements for the information that credit institutions selling NPL shall provide to prospective buyers. The objective of the draft ITS is to provide a common data standard for the NPL sales or transfers across the EU enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPL, thus improving the functioning of NPL secondary markets.
The draft ITS are built around the templates to be used for the provision of loan-by-loan information for the sales or transfers of NPL portfolios. The templates cover information regarding counterparties related to the loan, contractual characteristics of the loan itself, any collateral and guarantee provided, any legal procedures and enforcement procedures in place, and the historical collection of loan repayment. The NPL transaction data templates are also complemented by a data glossary and the instructions for filling in the templates.
The draft ITS are based on strong proportionality arrangements, focusing on the sales of portfolios of NPL and setting different information requirements depending on the nature of the borrowers and of the loans included in the portfolios to be sold, by specifying mandatory data fields. Proportionality is further reinforced by allowing all data fields to be treated as not mandatory for certain types of transactions.
These draft ITS have been submitted to the European Commission for adoption.
Article 16(1) of the Directive on credit servicers and credit purchasers (Directive (EU) 2021/2167) mandates the EBA to develop draft ITS to specify the templates to be used by credit institutions for the provision of information to credit purchasers when selling or transferring NPL for the purposes of financial due diligence and valuation of NPL.
The EBA has developed the draft ITS leveraging on the experience gained with the voluntary use of the NPL data templates, which it had developed in 2017 and reflecting the industry feedback on the use of these templates and wider market practices. The EBA collected this input while developing the discussion paper that was published in May 2021.
Through these draft ITS the EBA is not promoting sales or transfers of NPL as the main NPL reduction strategy and sees them as just one possible tool available to credit institutions. The EBA notes that it is for the credit institutions to determine best NPL reduction strategy in accordance with the EBA Guidelines on management of non-performing and forborne exposures.
The European Banking Authority (EBA) today launched a public consultation on the draft Implementing Technical Standards (ITS) specifying the requirements for the information that sellers of non-performing loans (NPL) shall provide to prospective buyers, seeking to improve the functioning of NPL secondary markets. The objective of the draft ITS is to provide a common standard for the NPL transactions across the EU enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPL.
Common templates, including data fields with their definitions and characteristics set out in the draft ITS would facilitate the sales of NPL on secondary markets, increase efficiency of those markets and reduce entry barriers for small credit institutions and smaller investors wishing to conclude transactions.
The draft ITS are built around the templates to be used for the provision of loan-by-loan information regarding counterparties related to NPL, contractual characteristics of the loan itself, any collateral and guarantee provided with the associated enforcement procedures and the historical collection and repayment schedule of the loan. The NPL transaction templates are also complemented by a data glossary and the instructions for filling in the templates.
The draft ITS also take into account the proportionality principle by setting different information requirements depending on the size of NPL, specifying the mandatory and non-mandatory data fields, and considering a different scope of application of the data fields in relation to the nature of the borrower (private individual or corporate), and that of the loan (secured or not).
The EBA has developed the draft ITS leveraging on the experience gained with the voluntary use of the NPL data templates, which it had developed in 2017 and reflecting the industry feedback on the use of these templates and wider market practices. The EBA collected these experiences while developing the discussion paper that was published in May 2021.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 31 August 2022 extended to 7 September 2022 . All received contributions will be published at the end of the consultation, unless requested otherwise.
A public hearing on the draft ITS will take place via online meeting on Wednesday 15 June 2022 from 10:00 to 12:00 CET. Please register for the hearing here by 13 June 2022 16:00 CET.
Following the consultation period, the draft ITS will be finalised and submitted to the European Commission by the end of 2022.
Article 16(1) of the Directive on credit servicers and credit purchasers (Directive (EU) 2021/2167) mandates the EBA to develop draft ITS to specify the templates to be used by credit institutions for the provision of information to credit purchasers when selling or transferring non-performing loans (NPL) for the purposes of financial due diligence and valuation of NPLs.