Final and translated into the EU official languages
These Guidelines aim to ensure harmonised assessment and treatment of significant risk transfer (SRT) across all EU Member States. They have been produced according to article 243 or article 244 of the Capital Requirements Regulation (CRR) and apply to both originator institutions and competent authorities.
The European Banking Authority (EBA) launched today a public consultation on draft Guidelines providing guidance to both originator institutions and competent authorities when assessing significant risk transfer (SRT) for securitisation transactions. These Guidelines will be part of the EU Single Rulebook in the banking sector and will ensure harmonised assessment and treatment of significant risk transfer across all EU Member States. The public consultation runs until 17 March 2014.
The EBA recognises that securitisation can be used as an effective credit risk transfer tool and for risk management purposes. If certain criteria are met, including the SRT requirements, originator institutions of a securitisation may consider the credit risk transfer in the calculation of own funds requirements. However, to avoid regulatory capital arbitrage, it is important that competent authorities and originator institutions consider a range of factors when assessing whether effective credit risk transfer has occurred and SRT requirements have been met in a given transaction when transferring the credit risk to an independent third party.
In this respect, the proposed Guidelines include (i) requirements for originator institutions when engaging in securitisation transactions for SRT; (ii) requirements for competent authorities to assess transactions that claim SRT; (iii) requirements for competent authorities when assessing whether commensurate credit risk has been transferred to independent third parties.
Consultation process
Comments 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 17.03.2014.
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 28 January 2014 from 14:00-16:00 UK time.
Background
The proposed draft Guidelines have been developed on the basis of Regulation 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms which mandates the EBA to issue guidelines and to monitor the range of practices in relation to the assessment and treatment of significant risk transfer.
The European Banking Authority (EBA) published today a final set of Guidelines that will support both originator institutions and competent authorities in the assessment of significant risk transfer (SRT) for securitisation transactions. These Guidelines will be part of the EU Single Rulebook in the banking sector and will ensure harmonised assessment and treatment of significant risk transfer across all EU Member States.
The EBA recognizes that securitisation in a well-defined prudential framework is beneficial to banks and is a key funding tool for the real economy. Furthermore, it is a useful tool to achieve credit risk transfer and risk-sharing in the financial system and to support the current deleveraging and de-risking process of EU banks without inducing an excessive contraction in the real economy.
The Guidelines published today aim at ensuring a more consist approach in the assessment of significant risk transfer across the EU and at achieving a level playing field in this area. The Guidelines include (i) requirements for originator institutions when engaging in securitisation transactions for SRT; (ii) requirements for competent authorities to assess transactions that claim SRT; (iii) requirements for competent authorities when assessing whether commensurate credit risk has been transferred to independent third parties; and finally (iv) a standard template on how competent authorities should provide information to EBA for approved transactions claiming SRT.
These Guidelines have been developed in accordance with Article 243 or Article 244 of the Capital Requirements Regulation (CRR) and are applicable for all transactions originated from the day of adoption of the Guidelines.
The EBA will provide advice to the European Commission by 31 December 2017 on whether a binding technical standard is required on SRT.
The European Banking Authority (EBA) launched today a public consultation on draft Guidelines providing guidance to both originator institutions and competent authorities when assessing significant risk transfer (SRT) for securitisation transactions. These Guidelines will be part of the EU Single Rulebook in the banking sector and will ensure harmonised assessment and treatment of significant risk transfer across all EU Member States. The public consultation runs until 17 March 2014.
The EBA recognises that securitisation can be used as an effective credit risk transfer tool and for risk management purposes. If certain criteria are met, including the SRT requirements, originator institutions of a securitisation may consider the credit risk transfer in the calculation of own funds requirements. However, to avoid regulatory capital arbitrage, it is important that competent authorities and originator institutions consider a range of factors when assessing whether effective credit risk transfer has occurred and SRT requirements have been met in a given transaction when transferring the credit risk to an independent third party.
In this respect, the proposed Guidelines include (i) requirements for originator institutions when engaging in securitisation transactions for SRT; (ii) requirements for competent authorities to assess transactions that claim SRT; (iii) requirements for competent authorities when assessing whether commensurate credit risk has been transferred to independent third parties.
Consultation process
Comments 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 17.03.2014.
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 28 January 2014 from 14:00-16:00 UK time.
Background
The proposed draft Guidelines have been developed on the basis of Regulation 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms which mandates the EBA to issue guidelines and to monitor the range of practices in relation to the assessment and treatment of significant risk transfer.